EXPERTsuisse - Swiss Expert Association for Audit, Tax and Fiduciary

In Switzerland, the Federal Audit Oversight Authority (FAOA) is responsible for the establishment and implementation of a quality assurance (QA) review system for all statutory audits of financial statements. The FAOA has established a QA review system for all public interest entities (PIEs) and a peer review system for registered sole auditors. As reported by EXPERTsuisse, the FAOA’s QA review system aligns with the best practices of SMO 1.

QA is a top priority for EXPERTsuisse. As the recognized audit standard-setter, EXPERTsuisse has issued a national quality control standard (ISQC-CH 1), which converged with the IAASB’s quality control standards. EXPERTsuisse reports plans to update the ISQC-CH with the IAASB Quality Managemennt Standards by 2025.

EXPERTsuisse collaborated with the FAOA on the development and subsequent improvements of the QA review system. EXPERTsuisse maintains a continuous dialogue with the FAOA to discuss and monitor legal and regulatory developments for their impact on the profession.

To assist auditors in implementing relevant standards, EXPERTsuisse has carried out numerous trainings and issued an electronic Guide to Quality Control in SMPs. Furthermore, EXPERTsuisse publishes guidelines and sample templates for members conducting FAOA quality assurance inspections as peers. In addition, EXPERTsuisse disseminates information on relevant standards through publications and its website.

EXPERTsuisse is encouraged to adopt the IAASB Quality Management standards, effective in December 2022, which will require significant change management for FAOA and firms. EXPERTsuisse is encouraged to reports its progresses with adopting the standards and preparing members and other relevant stakeholders for the change.

Current Status: Review & Improve

The Federal Act on the Licensing and Oversight of Auditors (AOA) of 2005 sets initial and continuing professional development (IPD and CPD) requirements for auditors. Further, the Federal Act on Vocational and Professional Education and Training and the Ordinance on Vocational and Professional Education and Training provide the legal basis for the initial professional development (IPD).

To be eligible to practice as a Licensed Audit Expert for statutory audits, individuals must: have a university degree, have work experience of at least three years, and pass a final assessment. A Licensed Auditor undertaking statutory limited exemptions (moderate assurance engagements) is subject to at least 1 year’s practical experience. EXPERTsuisse offers an IPD program for candidates who want to become a licensed auditor. EXPERTsuisse reports having an ongoing process to review and ensure alignment with the requirements of the IES, including reviewing its curriculum and instruction to lecturers to align with revised IES.

EXPERTsuisse provides numerous opportunities for CPD for its members—all of whom must complete 120 hours over a two-year rolling period. Online courses now qualify for CPD if they are output-based. EXPERTsuisse has established an online CPD monitoring mechanism for its members and will do sample checks to ensure compliance.

In addition to auditors, there are several other qualifications—certified accountants, tax experts, fiduciary experts, certified experts in accounting and controlling, among others—for professional accountants in Switzerland but none are regulated at the state level. EXPERTsuisse is in regular contact with the State Secretariat for Education, Research and Innovation (SERI) to ensure alignment with the IES requirements and Swiss regulation. The auditor education program administered by EXPERTsuisse has received the highest ranking within the National Qualifications Framework for Vocational and Professional Qualifications (NQF VPQ) by SERI.

The EXPERTsuisse has demonstrated an ongoing process to maintain its fulfillment of the SMO 2 obligations and is committed to continuous improvement.

Current Status: Sustain

The Federal Audit Oversight Authority (FAOA) is legally responsible for setting auditing standards for public interest entities (PIEs) but has delegated this authority to the EXPERTsuisse. EXPERTsuisse, therefore, sets auditing standards applicable to all companies that undergo a statutory audit. EXPERTsuisse has developed national auditing standards that converge with ISA, with modifications (add-ons) for Swiss-specific issues. EXPERTsuisse reports that it has an ongoing system in place to incorporate new and revised standards. In 2022, a revised version of the Swiss Standards on Auditing was published that converged with the 2018 ISAs (including the revised ISA 250 and 540).

EXPERTsuisse will progress with the adoption of ISA 220 (Revised), ISA 315 (Revised) and ISA 600 (Revised) (applicable in the 2021 and 2022 ISA) in 2024 so that the gap between ISA and Swiss national auditing standards will be further reduced.

To facilitate implementation, EXPERTsuisse disseminates information on updates to the standards and international developments in the area through publications and its website, offers professional development activities, and develops implementation guidelines. EXPERTsuisse participates in the translation of ISA into German along with the Institut der Wirtschaftsprüfer of Germany and with the Austrian Institut Österreichischer Wirtschaftsprüfer, while French translations are coordinated with the Belgian and French accountancy organizations.

EXPERTsuisse has recently participated in international standard-setting by providing comments on the Monitoring Group Consultation, on the ISA for LCE Exposure Draft, and is planning to provide comments on the ISSA 5000 Exposure Draft by the end of 2023.

Timely translation of standards is important for maintaining up-to-date adoption and successful implementation efforts and is part of the EXPERTsuisse fulfilling the ‘best endeavors’ concept within the SMO 3 obligations. The association is encouraged to continue its progress in aligning the Swiss standards with the latest standards issued by the IAASB – at this time, the 2022 IAASB Handbook.

Current Status: Review & Improve

Ethical requirements for auditors in Switzerland are established in the Swiss Code of Obligations (Swiss CO), as amended in 2023, and the Federal Act on the Licensing and Oversight of Auditors of 2005. The legislation refers only to independence requirements for auditors, which, as reported by the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse), are aligned with the IESBA requirements.

EXPERTsuisse has also developed its own Code of ethics based on the 2020 IESBA Code of Ethics. This is for all its members who join the association voluntarily. The Swiss Code of Ethics (Principles of Independence) has been revised to reflect revisions from the IESBA Code of Ethics in 2018 and 2020.

To support implementation, EXPERTsuisse disseminates information, maintains a hotline for its members to ask questions, and offers seminars and presentations for its members and the Federal Audit Oversight Authority. In 2023, various events and seminars were held regarding the new IESBA requirements and the revision of the Swiss Code of Ethics (Principles of Independence).

Adopting the latest International Code of Ethics issued by the IESBA is an important cornerstone for the accountancy profession. Auditors and other accountancy professionals can apply a significant portion of the IESBA Code. EXPERTsuisse is encouraged to adopt—or clarify if it has—the latest IESBA Code in its entirety (i.e., not only independence requirements) for its association members. At this time, the 2023 International Code of Ethics is the latest version issued by IESBA and includes several revisions related to fees, non-assurance services, among others that might be applicable to EXPERTsuisse members. Timely translation of standards is also important for maintaining up-to-date adoption and successful implementation efforts and is part of the EXPERTsuisse fulfilling the ‘best endeavors’ concept within the SMO 4 obligations.

Current Status: Review & Improve

The Swiss Federal Finance Administration (FFA), the entity responsible for the adoption of public sector accounting standards, has adopted accrual-basis IPSAS (modified for local context) through the Financial Budget Ordinance.

EXPERTsuisse states it is proactive in this area via the following endeavors: (i) ongoing communication with FFA and support for its activities; (ii) providing guidance to practitioners engaged in auditing public sector financial statements; and (iii) promoting the national harmonization of public sector auditing rules within Swiss cantons through its Public Sector Committee.

EXPERTsuisse has demonstrated an ongoing process to maintain its fulfillment of the SMO 5 obligations and is committed to continuous improvement.

Current Status: Sustain

In Switzerland, the Federal Audit Oversight Authority (FAOA) is responsible for establishing investigative and disciplinary (I&D) systems for auditors—the only regulated segment of the profession. In addition, EXPERTsuisse has established its own I&D system for its members, which includes other professional accountants who might join voluntarily. As reported by EXPERTsuisse, both I&D systems fulfill the SMO 6 benchmark.

EXPERTsuisse has established its own Professional Ethics Committee which operates independently of EXPERTsuisse's structure. It conducts investigations related to its members’ compliance with obligations and regulations (e.g., ethical requirements, CPD) by being an EXPERTsuisse member using information and complaints-based approaches. It will issue sanctions as needed. EXPERTsuisse disseminates information on regulations that might have disciplinary implications for its members.

EXPERTsuisse has demonstrated an ongoing process to maintain its fulfillment of the SMO 6 obligations and is committed to continuous improvement.

Current Status: Sustain

In Switzerland, accounting standards are established by the Swiss Code of Obligations (Swiss CO), as amended in 2023. Companies—other than public interest entities (PIEs), which are defined as listed companies and financial institutions—may prepare financial statements in accordance with IFRS Standards, IFRS for Small- and Medium-sized Entities (SMEs), US GAAP, and Swiss GAAP FER. PIEs are required to prepare their group financial statements in accordance with IFRS or US GAAP if they are registered on a major stock exchange and in accordance with Swiss GAAP FER if they are registered on the domestic market. The Swiss GAAP FER Foundation, an independent private standard-setter, establishes Swiss GAAP FER.

As part of supporting the ongoing adoption of corporate accounting standards, EXPERTsuisse indicates it: (i) monitors IASB updates and changes to IFRS; (ii) disseminates information on the standards; (iii) meets on a regular basis with the SIX Swiss Exchange, which requires the application of IFRS and US-GAAP; (iv) supports the FER Foundation in their effort to improve the Swiss GAAP FER; (v) provides training on IFRS; and (vi) prepares implementation guidelines.

EXPERTsuisse has demonstrated an ongoing process to maintain its fulfillment of the SMO 7 obligations and is committed to continuous improvement.

Current Status: Sustain