Tuesday, March 04, 2008

Sarbanes in Switzerland?

When it comes to administration, the Swiss are famous for their efficiency and attention to detail. It is somewhat surprising, then, that a number of changes to company audit law are only now coming into effect. Most notably, from January 1st 2008 auditors must verify internal control systems at the companies they audit.

Inevitably, this evokes comparisons with the widely reviled Section 404 of the Sarbanes-Oxley Act in the US. Swiss officials, however, sought to avoid similarly onerous rules, explains Simon Marti, a partner at KPMG in Zurich. For example, early draft legislation required auditors to verify that internal control systems were "functioning," a term that was later removed "to avoid extensive operational effectiveness testing," Marti says. Under the new rules, audits need only to verify the existence of internal controls using a walk-through test of a single transaction. What's more, executives are not required to sign off or certify control systems.

Sarbanes in Switzerland?

Labels: compliance, internal control, Switzerland, walk-throughs

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