The limited statutory examination is less extensive than the ordinary audit. The scope of the audit is reduced and limits itself to analytical audit procedures, interviews and singular detailed examinations. Therefore the audit report only confirms that the annual financial statement is free from material misstatements.
The limited statutory audit has the following advantages:
- Lesser effort for the audit of the Annual Financial Statement.
It’s logical: as the audit procedures are reduces in size and depth, the effort for the audit becomes smaller. Not only the cost is less but also the burden for the accounting department.
- Orientation at the „Standard fort he limited statutory audit“.
For the limited statutory audit only this Swiss standard is relevant. With this standard the limited statutory audit gets disconnected from the ever more complex international audit standards. This makes sense, as an audit by international standards would be completely overdone for SME enterprises.
- Less extensive rules concerning the auditors independence.
Our experience shows that SME expect high quality when it comes to services in the field of audit or business consulting. Frequently we are the first contact point when it questions concerning accounting, VAT or social insurance and the like pop up. For companies that undergo a limited statutory audit still can use us as a one-stop show for all services in the accounting field. This is forbidden, when an ordinary audit is done.
Of course the concept also bears some disadvantages:
- No assessment of the internal control system (ICS)
Neither the audit of the existence nor the control of the effectiveness of the ICS is intended within the limited statutory audit. Therefore the auditor cannot make any suggestions or help with ideas for improvement of the ICS.
- No reporting to the board of directors
Only a negative audit opinion: „financial statement is free from material misstatement“ is given. The report to the annual general meeting is restricted to violations of the Swiss Code of Obligations (CO). A comprehensive report to the board of directors is not provided.
You want to eradicate the disadvantages of the limited statutory audit? If so, you should read our future Blog article about how to increase the benefit of the audit or get directly in touch with our audit experts. We would love to share our ideas with you!