Facts

Facts as a compass in a complex business environment

Today’s industries are more dynamic, the media environment is faster-moving and the stakeholder groups are more complex and critical. This makes the preparation and verification of information more challenging than ever as regulatory requirements increase.

And only correct information enables our society and economy to function.

In the following section, we present facts and figures and answer questions. We present a detailed view of the issues we are concerned with. We show where our responsibility begins and how far it extends. We provide information on the trends in the industry and the developments that are decisive for future sustainability.

 

Questions and answers

1. What is the purpose of auditing and who benefits from it?

By means of reliable and independent services, auditing ensures that the relevant information needs of industries, markets and capital markets are standardised, traceable and efficiently met.

Transparency, certainty and reliable information are essential for building trust among business actors as well as social and political stakeholders. This trust is an important prerequisite for the functioning of the economy and the common good.

By auditing, investigating and verifying information, processes and diverse business issues, we generate added value for companies, public authorities and society as a whole, acting in the public interest.

We create a robust basis of trust for private companies and the public sector – for investors, lenders, customers and clients, tax authorities, social insurers, social stakeholders and many others.

For the benefit of society, we work to build trust in companies, economic systems and regulatory authorities. This foundation ensures that markets can grow, investments are made and the economy as a whole is able to prosper, resulting in an important contribution to the common good.

Our core business is the validation, testing and certification of business information and information flows. In terms of auditing in the narrower sense, we also fulfil a public mandate by carrying out statutory audits in our capacity as statutory auditors. We do this with the aim of providing external third parties with access to financial information and certainty about such information. As statutory auditors, we also perform other tasks: for instance, we examine proposals for the appropriation of profit from the board of directors to the general meeting of shareholders as well as the interim financial statements of companies experiencing difficulties. The latter is done with the aim of assessing petitions for bankruptcy. Therefore, as statutory auditors, we also make an important contribution to creditor protection.

Because the results of our work are in many cases publicly available, we ensure that all stakeholders concerned are provided with a balance of information. Thanks to our independence and the strictest quality requirements, our reports have the quality of “seals of approval” in terms of compliance with standards, relevant laws and other principles. This creates trust between companies, market players, the public sector and society. As a result, industries, capital markets and the common good are able to prosper. Our work is therefore in the public interest.

2. How independent are auditors?

By means of reliable and independent services, auditing ensures that the relevant information needs of industries, markets and capital markets are standardised, traceable and efficiently met.

Transparency, certainty and reliable information are essential for building trust among business actors as well as social and political stakeholders. This trust is an important prerequisite for the functioning of the economy and the common good.

By auditing, investigating and verifying information, processes and diverse business issues, we generate added value for companies, public authorities and society as a whole, acting in the public interest.

We create a robust basis of trust for private companies and the public sector – for investors, lenders, customers and clients, tax authorities, social insurers, social stakeholders and many others.

For the benefit of society, we work to build trust in companies, economic systems and regulatory authorities. This foundation ensures that markets can grow, investments are made and the economy as a whole is able to prosper, resulting in an important contribution to the common good.

Our core business is the validation, testing and certification of business information and information flows. In terms of auditing in the narrower sense, we also fulfil a public mandate by carrying out statutory audits in our capacity as statutory auditors. We do this with the aim of providing external third parties with access to financial information and certainty about such information. As statutory auditors, we also perform other tasks: for instance, we examine proposals for the appropriation of profit from the board of directors to the general meeting of shareholders as well as the interim financial statements of companies experiencing difficulties. The latter is done with the aim of assessing petitions for bankruptcy. Therefore, as statutory auditors, we also make an important contribution to creditor protection.

Because the results of our work are in many cases publicly available, we ensure that all stakeholders concerned are provided with a balance of information. Thanks to our independence and the strictest quality requirements, our reports have the quality of “seals of approval” in terms of compliance with standards, relevant laws and other principles. This creates trust between companies, market players, the public sector and society. As a result, industries, capital markets and the common good are able to prosper. Our work is therefore in the public interest.

3. What is covered by an audit of financial statements – and what is not covered?

By means of reliable and independent services, auditing ensures that the relevant information needs of industries, markets and capital markets are standardised, traceable and efficiently met.

Transparency, certainty and reliable information are essential for building trust among business actors as well as social and political stakeholders. This trust is an important prerequisite for the functioning of the economy and the common good.

By auditing, investigating and verifying information, processes and diverse business issues, we generate added value for companies, public authorities and society as a whole, acting in the public interest.

We create a robust basis of trust for private companies and the public sector – for investors, lenders, customers and clients, tax authorities, social insurers, social stakeholders and many others.

For the benefit of society, we work to build trust in companies, economic systems and regulatory authorities. This foundation ensures that markets can grow, investments are made and the economy as a whole is able to prosper, resulting in an important contribution to the common good.

Our core business is the validation, testing and certification of business information and information flows. In terms of auditing in the narrower sense, we also fulfil a public mandate by carrying out statutory audits in our capacity as statutory auditors. We do this with the aim of providing external third parties with access to financial information and certainty about such information. As statutory auditors, we also perform other tasks: for instance, we examine proposals for the appropriation of profit from the board of directors to the general meeting of shareholders as well as the interim financial statements of companies experiencing difficulties. The latter is done with the aim of assessing petitions for bankruptcy. Therefore, as statutory auditors, we also make an important contribution to creditor protection.

Because the results of our work are in many cases publicly available, we ensure that all stakeholders concerned are provided with a balance of information. Thanks to our independence and the strictest quality requirements, our reports have the quality of “seals of approval” in terms of compliance with standards, relevant laws and other principles. This creates trust between companies, market players, the public sector and society. As a result, industries, capital markets and the common good are able to prosper. Our work is therefore in the public interest.

4. How is the quality of auditors’ work assessed

Auditors require state accreditation if they wish to provide statutory audit services. The accreditation of audit firms is limited to five years; after that, they must again demonstrate to the supervisory authority that they meet the legal requirements with respect to quality and the training and further education of their staff.

Audit firms active in the auditing of public companies are also regularly checked for compliance with the requirements through inspections conducted by the supervisory authority.

By law and according to the regulations of the EXPERTsuisse professional association, audit firms must take comprehensive quality assurance measures. These include regulations stipulating that work results must first be reviewed internally before they are transmitted to external recipients in the form of a report. The professional regulations also require audit firms to perform random sampling checks on their mandates within the scope of internal Audit Quality Reviews to ensure that they comply with the guidelines. In addition, quality assurance includes continuous compliance with obligations in respect of further training and education. Members of the profession must accordingly complete at least 60 hours of further training per year.

Quality is measured by means of Audit Quality Indicators, which also form part of the supervisory authority’s monitoring of audit firms. Large audit firms are further required to disclose their Audit Quality Indicators as part of their annual reporting. Audit quality is also measured directly via regular inspections by the supervisory authority. Inadequate quality is subject to penalties ranging all the way to the withdrawal of accreditation (professional ban).

5. How transparent is an audit report?

An audit report contains the auditor’s written findings on the audit performed. An audit report therefore contains a statement as to whether the subject of the audit (e.g. the annual financial statements) complies with the requirements with or without restrictions. The auditor must provide adequate and comprehensible reasons for this assessment.

In the case of audits of listed companies, audit reports have recently been expanded to include particularly important audit issues, known as Key Audit Matters (KAMs). This is intended to give recipients of the report greater insight into the company concerned and enable them to better assess the impact of such audit matters on the performance of the audit. The purpose of the new requirements for auditors is to promote individualised reporting to interested readers of financial statements and to provide the stakeholders of an audited company with deeper insight into the audit and the way in which the audit opinion is reached.

A short report is provided to the shareholders or partners and a comprehensive report is submitted to the board of directors or the executive board. In this comprehensive report, the auditor must disclose further information that does not necessarily influence the audit opinion. This comprehensive report regularly contains recommendations to the company, e.g. suggestions for improvements to internal processes. For corporate management, the comprehensive report is therefore an important and valued management tool. The comprehensive report regularly contains information on internal matters and is therefore subject to professional confidentiality.