Foreign audit firms

Licensing requirement for foreign audit firms

Foreign audit firms require a licence as an audit firm under state oversight if they provide statutory or comparable audit services for companies governed by foreign law that directly or indirectly use the Swiss capital market (Art. 8 AOA).

This applies in particular to companies whose equity securities or bonds are listed on a Swiss stock exchange.

Licensing requirements

Auditing bodies of foreign companies that are not exempt from the licensing requirement must submit an application to the FAOA for licensing as an audit firm under state oversight, based abroad.

Licensing is granted if the requirements under Art. 9 AOA or equivalent criteria are met and the obligations to provide information and report to the FAOA, as well as to grant access, are ensured (Art. 9a AOO).

Specifically, this means that:

  1. The majority of the members of the highest management or administrative body and of the executive body must be licensed as audit experts or hold a comparable foreign qualification (Art. 9 para. 1 lit. a AOA in conjunction with Art. 6 para. 1 lit. a AOA).
  2. At least one-fifth of the persons involved in the provision of audit services are licensed as audit experts or hold a comparable foreign qualification (Art. 9 para. 1 lit. a AOA in conjunction with Art. 6 para. 1 lit. b AOA).
  3. All persons who manage audit services must be licensed as audit experts or hold a comparable foreign qualification (Art. 9 para. 1 lit. a AOA in conjunction with Art. 6 para. 1 lit. c AOA).
  4. The audit firm has an internal quality assurance system and monitors its adequacy and effectiveness (Art. 9 para. 1 lit. a AOA in conjunction with Art. 6 para. 1 lit. d AOA and Art. 9 para. 1 AOO).
  5. The audit firm ensures compliance with legal obligations (Art. 9 para. 1 lit. b AOA in conjunction with Art. 11 AOO).
  6. There is sufficient liability insurance (Art. 9 para. 1 lit. c AOA in conjunction with Art. 11 AOO).

The obligations to provide information and report, as well as to grant access to the FAOA, are ensured (Art. 9a para. 1 lit. b AOO).

Fees for state-regulated audit firms
ServiceFeeAOO provision
Assessment of the licence applicationAt least CHF 5,000 Art. 38 para. 5 AOO
Annual supervisory feeAt least CHF 10,000Art. 42 AOO
Review/inspection by the FAOABased on time spentArt. 39 AOOV

Note:
Fees may vary depending on the amount of work involved.

Exceptions to the licensing requirement

A licence with the FAOA is not required if the audit firm is subject to a foreign audit oversight authority recognized by the Federal Council.

In the case of audit services for companies with bond obligations, the licensing requirement also does not apply if:

  • the relevant bonds are guaranteed by the company whose audit firm is already licensed or recognized (Art. 8 para. 3 AOA), or
  • investors have been explicitly informed that the audit firm is not under state oversight (Art. 8 para. 5 AOA and Disclosure Ordinance FAOA).