Interne Qualitätssicherung in Revisionsunternehmen

I Background

1 An audit firm is licensed to provide legally stipulated auditing services if its management structure guarantees that the individual audit mandates are sufficiently supervised (Art 6 para. 1 let. d AOA 1). An audit firm has a sufficient management structure for supervising individual engagements if it has an internal quality control system and supervises the appropriateness and effectiveness of the quality control principles and measures (Art. 9 para. 1 AOO 2).

2 The purpose of this circular is to specify the applicable standards for internal quality

control in audit firms. The basis is Art. 6 para. 1 let. d AOA.

II Audit firms licensed as auditors

3 The limited audit of annual financial statements (Art. 729 ff. CO 3) must be performed

by an audit firm holding at least an auditor licence (Art. 727c CO). Internal quality control with regard to the audit of the annual financial statements must meet at least the instruction requirements of TREUHAND|SUISSE for quality control with small and medium-sized audit firms in the current version.

4 Margin no. 3 also applies particularly to limited audits which are performed on request

of one or several persons with a minority holding.

5 Internal quality control with regard to other legally stipulated auditing services (Art. 2

let. a AOA) which by law must be performed by an audit firm with at least an auditor licence 4, shall be based on the provisions in margin no. 7.

6 Margin no. 3 also applies if the audit firm is licensed as an audit expert and does not

provide any auditing services within the meaning of the margin no. 5 and 7 to 9.

1 Federal Act of 16 December 2005 on the Licensing and Oversight of Auditors (AOA; SR 221.302).

2 Ordinance of the Federal Council of 22 August 2007 on the Licensing and Oversight of Auditors

(AOO; SR 221.302.3). 3 Code of Obligations (CO; SR 220). 4 Public companies (Art. 727 para. 1 no. 1 CO) must have audits, which according to legal provisions, must be performed by a licensed auditor or a licensed audit expert respectively, also conducted by an audit firm under state oversight (Art. 727b para. 1 clause 2 CO). Companies above the legal threshold values (Art. 727 para. 1 no. 2 CO) must have audits, which according to legal provisions, must be performed by a licensed auditor, also conducted by an audit firm with at least the licence as an audit expert (Art. 727b para. 1 no. 2 and para. 2 no. 2 CO).

III Audit firms licensed as audit experts

7 The ordinary audit of annual accounts (Art. 728 ff. CO) must be performed by an audit

firm with at least an audit expert licence (Art. 727b para. 2 CO). Internal quality control must meet at least the requirements of the Swiss standard of quality control (ISQC-

CH 1) 5 and ISA-CH 220 6 in the current version.

8 Margin no. 7 particularly also applies to:

a. the ordinary audit which is performed on request of one or several persons with a minority holding; b. the ordinary audit being performed according to the articles of association or based on the decision of the supreme body or of a supervisory authority; c. the audit of the annual accounts of a pension fund in the area of occupational oldage, survivor's and disability pensions (Art. 52c para. 1 let. a LOB 7); d. the audit of the annual accounts of a health insurance company (Art. 25 para. 1 let. a HIOA 8); e. the audit of the annual accounts of a casino or organiser of large games (Art. 49 para. 3 BGS 9); f. the audit of an OASI compensation office or branch (Art. 68 and Art. 68a OASIA 10).

9 Internal quality control with regard to other legally stipulated auditing services (Art. 2

let. a AOA) which by law must be performed by an audit firm with at least an audit expert licence 11 shall be based on the provisions in margin no. 7.

IV Audit firms under state oversight

10 Internal quality control requirements for audit firms under state oversight are based on

Art. 5 OO-FAOA 12 and recognized standards according to Circ. 1/2008 13.

5 International Standard on Quality Control 1, Quality Control for Firms That Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements (ISQC-CH 1). 6 Swiss Auditing Standard 220, quality control during the annual audit (ISA-CH-220). 7 Federal Act of 25 June 1982 on Occupational Old-Age, Survivor's and Disability Pensions (LOB; SR 831.40).

8 Federal Act of 26 September 2014 on the Oversight of Social Health Insurance (Health Insurance Oversight

Act, HIOA); SR 832.12). 9 Federal Act on Gambling of 29 September 2017 (Gambling Act, BGS; SR 935.51). 10 Federal Act of 20 December 1946 on Old-Age and Survivors Insurance (OASIA; SR 831.10).

11 Public companies (Art. 727 para. 1 no. 1 CO) must have audits which according to the legal provisions must be

performed by a licensed audit expert also conducted by an audit firm under state oversight (Art. 727b para. 1 clause 2 CO).

12 Ordinance of the Federal Audit Oversight Authority of 17 March 2008 on the Oversight of Audit Firms (OO-

FAOA; SR 221.302.33). 13 Circular 1/2008 of 17 March 2008 on the recognition of Auditing Standards and Quality Controls (Circ. 1/2008).

V Transitional provisions

11 Audit firms performing auditing services according to margin no. 3 only and in which

only one person has the necessary licence must operate an internal quality control system that meets the minimum requirements set out in margin no. 3. with effect from 1 September 2017.

12 Audit firms performing auditing services according to the margin no. 5 and 9 but none

according to margin no. 7 must set up an internal quality control system according to the requirements of QS 1 and SAS 220 by 1 September 2016.

13 Audit firms carrying out auditing services according to margin no. 8 let. c must set up

an internal quality control system according to the requirements of QS 1 and SAS 220 by 31 December 2015.

13bis Audit firms carrying out auditing services according to margin no. 8 let. f must adapt their internal quality control system according to the requirements of ISQC-CH 1 and ISA-CH 220 by 31 December 2024.

VI Enactment

14 This circular shall enter into force on 1 January 2015. 14

14 This circular was amended as follows:

• Amendment of 17 August 2016 (in force since 1 September 2016).

• Amendment of 23 August 2017 (in force since 1 October 2017).

• Amendment of 12 October 2021 (in force since 15 October 2021).

• Amendment of 14 December 2022 (in force since 15 December 2022).

• Amendment of 4 December 2023 (in force since 1 January 2024).

Annex: Schedular overview of quality control in legally stipulated auditing services

Minimum requirements for Limited audit Law article Minimum licence internal quality control 15

Stock corporation Art. 727a CO Auditor Instruction Treuhand | Suisse

Partnership limited by shares Art. 764 para. 2 CO in conj. with Art. 727a CO Auditor Instruction Treuhand | Suisse

Limited liability company Art. 818 para. 1 CO in conj. with Art. 727a CO Auditor Instruction Treuhand | Suisse

Cooperative Art. 906 CO in conj. with Art. 727a CO Auditor Instruction Treuhand | Suisse

Association Art. 69b para. 2 and 3 CC 16 in conj. with Auditor Instruction

Foundation Art. 83b para. 3 CC in conj. with Art. 727a CO Auditor Instruction Treuhand | Suisse

Minimum requirements for Ordinary audit Law article Minimum licence internal quality control Stock corporation Art. 727 CO Audit expert ISQC-CH 1 / ISA-CH 220

Partnership limited by shares Art. 764 para. 2 CO in conj. with Art. 727 CO Audit expert ISQC-CH 1 / ISA-CH 220

Limited liability company Art. 818 para. 1 CO in conj. with Art. 727 CO Audit expert ISQC-CH 1 / ISA-CH 220

Cooperative Art. 906 CO in conj. with Art. 727 CO Audit expert ISQC-CH 1 / ISA-CH 220

Association Art. 69b para. 1 and 3 CC in conj. with Audit expert ISQC-CH 1 / ISA-CH 220 Art. 727a CO

Foundation Art. 83b para. 3 CC in conj. with Art. 727a CO Audit expert ISQC-CH 1 / ISA-CH 220

Public company 17 Art. 727b para. 1 CO Audit firm under ISQC-CH 1 / ISA-CH 220 18 state oversight

Cf. transitional period to 1 September 2017 (margin no. 11). Swiss Civil Code (CC; SR 210). Art. 727 para. 1 no. 1 CO. Cf. Circ. 1/2014 (margin no. 10).

Audit of annual accounts by Minimum licence Minimum requirements for Law article special laws (basic licence) internal quality control

Mortgage bond clearing house Art. 38a PfG 19 Audit firm under ISQC-CH 1 / ISA CH 220 state oversight 20

Pension fund Art. 52c para. 1 let. a LOB Audit expert ISQC-CH 1 / ISA CH 220

OASI compensation offices Art. 68 and 68a OASIA Audit expert ISQC-CH 1 / ISA CH 220 and branches Investment foundation Art. 9 f. ASV 21 Audit firm under ISQC-CH 1 / ISA CH 220 state oversight

Health insurance company Art. 25 para. 1 let. a and para. 2 KVAG Audit expert ISQC-CH 1 / ISA CH 220

Casino and organiser of large Art. 49 para. 3 BGS Audit expert ISQC-CH 1 / ISA CH 220 games

Investment fund Art. 126 para. 1 let. a and para. 5 CISA 22 Audit firm under ISQC-CH 1 / ISA CH 220 state oversight20

SICAV Art. 126 para. 1 let. b and para. 5 CISA Audit firm under ISQC-CH 1 / ISA CH 220 state oversight20

Limited partnership for Art. 126 para. 1 let. c and para. 5 CISA Audit firm under ISQC-CH 1 / ISA CH 220 collective investment schemes state oversight20

SICAF Art. 126 para. 1 let. d and para. 5 CISA Audit firm under ISQC-CH 1 / ISA CH 220 state oversight20

Fund management company Art. 63 para. 1 let. b FinIA 23 Audit firm under ISQC-CH 1 / ISA CH 220 state oversight20

Asset manager of collective in- Art. 63 para. 1 let. b FinIA Audit firm under ISQC-CH 1 / ISA CH 220 vestment schemes state oversight20

Representative of foreign col- Art. 126 para. 1 let. f and para. 5 CISA Audit firm under ISQC-CH 1 / ISA CH 220 lective investment schemes state oversight20

Bank Art. 18 BankG 24 Audit firm under ISQC-CH 1 / ISA CH 220 state oversight20

Securities firms Art. 63 para. 1 let. b FinIA Audit firm under ISQC-CH 1 / ISA CH 220 state oversight20

Financial market infrastruc- Art. 84 FMIA 25 Audit firm under ISQC-CH 1 / ISA CH 220 tures and financial groups state oversight20

Financial conglomerate Art. 63 para. 1 let. b FinIA Audit firm under ISQC-CH 1 / ISA CH 220 state oversight20

Insurance company Art. 28 VAG 26 Audit firm under ISQC-CH 1 / ISA CH 220 state oversight20

19 Mortgage Bond Act of 25 June 1930 (PfG; SR 211.423.4). 20 Additional requirements according to Art. 9a AOA and Art. 11a ff. AOO. 21 Ordinance of the Federal Council of 10 and 22 June 2011 on Investment Foundations (ASV; SR 831.403.2). 22 Federal Act of 23 June 2006 on Collective Investment Schemes (CISA; SR 951.31). 23 Federal Act of 15 June 2018 on Financial Institutions (FinIA, SR 954.1). 24 Federal Act of 8 November 1934 on Banks and Savings Banks (BankG; SR 952.0).

25 Federal Act of 19 June 2015 on Financial Market Infrastructures and Market Conduct in Securities and Derivatives

Trading (FMIA; SR 958.1). 26 Federal Act of 17 December 2004 on the Supervision of Insurance Companies (VAG; SR 961.01).

Audit of particular Law article Minimum requirements for Minimum licence 27 processes (non-exhaustive) internal quality control

Audit with at least an Art. 635a CO Auditor ISQC-CH 1 / ISA CH 220 auditor licence Art. 652d CO Art. 652f para. 1 CO Art. 670 para. 2 CO Art. 725 para. 2 CO Art. 907 CO Art. 81 para. 1 FusG 28 Art. 85 para. 2 FusG Art. 13d para. 1 let. a GEA 29

Audit with at least an Art. 653f para. 1 CO Audit expert ISQC-CH 1 / ISA CH 220 audit expert licence Art. 653i para. 1 CO Art. 745 para. 3 CO Art. 795b CO Art. 825a para. 2 CO Art. 6 para. 2 FusG Art. 15 para.1 FusG Art. 25 para. 2 FusG Art. 40 FusG Art. 62 para. 1 FusG Art. 92 para. 1 FusG Art. 97 para. 3 FusG Art. 100 para. 2 FusG Art. 162 para. 3 IPRG 30 Art. 163d para. 1 IPRG Art. 164 para. 1 IPRG Art. 164 para. 2 let. b IPRG Art. 16 para. 2 DDTrO 31 Art. 68 para. 1 OASIA

27 Cf. the legal principle of uniform licensing (footnotes 4 and 11 above). 28 Federal Act of 3 October 2003 on Mergers, Demergers, Changes of Legal Form and Asset Transfers (FusG, SR 221.301). 29 Federal Act of 24 March 1995 on Gender Equality (GEA, SR 151.1). 30 Federal Act of 18 December 1987 on International Private Law (IPRG, SR 291).

31 Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and

Child Labour (DDTrO, SR 221.433).