Audit and review obligations
In Liechtenstein, companies from a certain size upwards are obliged to conduct an ordinary audit (audit of the annual financial statements). By contrast, most SMEs may subject themselves to a review. Under certain conditions, it is also possible to waive the review.
Audit obligation
Legal entities and fiduciary companies that exercise a commercial activity, or whose purpose pursuant to their articles of association permits the exercise of an activity of this nature, are required to appoint an auditor. EU-harmonised company forms such as companies limited by shares, partnerships limited by shares and companies with limited liability must in every case appoint an auditor, even if their purpose is not to engage in trade of a commercial nature. The same applies to companies that have publicly issued bonds or whose shares are listed on a stock market.
If a company exceeds the following criteria in two out of three cases in two consecutive financial years, it must subject its annual financial statements to an audit:
- CHF 7.4 million total assets
- CHF 14.8 million net sales proceeds
- 50 full-time positions on an annual average
Review
In Liechtenstein, the criteria that make it necessary to conduct an audit do not apply to most SMEs. Instead, these may subject themselves to an audit inspection – a so-called review. This audit type differs from regular audits of financial statements to the extent that the scope and depth of the audits are significantly less extensive.
Waiver of review
Under certain conditions, Liechtenstein companies may waive the review. This right already come sinto force when a company is founded.
Step 1: Checking the waiver requirements
- Businesses engaged in a commercial trade. A commercial trade exists if it is:
a) it is a self-employed activity
b) the activity is intended to last for a long period of time
c) the activity is intended to generate a profit
- Companies which are defined as micro-enterprises. A micro-enterprise may not exceed more than one of the following size criteria:
a) a balance sheet total of CHF 450,000 or more
b) Net sales of CHF 900,000 or more
c) More than 10 employees on average during the fiscal year
Step 2: Waiver on the part of the management
The administration of the company must waive the audit review in a unanimous resolution. If necessary, the Articles of Incorporation must be amended, as the auditor ceases to be an organ of the legal entity.
Step 3: Submission of the waiver
Companies that waive the auditor's review must submit a corresponding declaration to the Office of Justice. This declaration must contain the points mentioned above and be signed by at least one member of the board of directors or the management.
Step 4: Documents to be enclosed
Along with the declaration, the following documents must be delivered to the Office of Justice as proof:
a) A minute or minute excerpt of the administrative decision with original signatures of the chairperson and the recording secretary, or the corresponding circular resolution, or the original individual waivers
b) A copy of the profit and loss accounts for the last two years
c) A copy of the balance sheets of the last two years
d) A copy of the annual reports of the last two years
Further information
- The waiver of the audit review also applies to subsequent years.
- The waiver of the audit review shall be entered in the Commercial Register.
- The waiver remains in effect until a member of the administration requests an audit review.
- The documents submitted are not open to public inspection.
The Office of Justice may request a renewal of the declaration or further information and documents at any time. This is to verify that the conditions for the waiver of the audit review continue to exist.