The Committee must keep regular accounts. The accounting books (inventory, operating account and annual balance sheet) must be complete, clear and easy to consult, so that interested parties can obtain as accurate an account as possible of the entity’s economic situation ( art. 959 CO ).
The accounts are established in Swiss francs or in the most important currency for the company’s activities. If they are not drawn up in Swiss francs, the equivalents in Swiss francs must also be indicated ( art. 958 dC ). The accounts must be kept for at least 10 years (art. 958 fE CO ). It is therefore important to keep all supporting documents. The Code of Obligations applies by analogy to the provisions of the CO relating to corporations.
Audit of accounts
Associations are generally subject to a limited audit of their accounts, by an auditor, if a member of the association so requires. In other cases, the articles of association and the general assembly can freely organize the audit. It should be noted, however, that the ZEWO standards (recommendation no. 14) recommend appointing in any case at least one auditor, independent of the committee, to carry out a brief examination.
The association is subject to an audit if, during two successive financial years, two of the following values are exceeded:
- balance> CHF 10 million,
- turnover> CHF 20 million,
- staff> 50 full-time staff on average per year.
As part of the ordinary audit of the accounts, the auditors will verify not only the conformity of the accounts with the legal and statutory provisions, but also the existence of an internal control system.
Presentation of the accounts
Associations are required to keep simple cash flow accounts, but it is preferable to produce annual accounts from the outset (a profit and loss statement, a balance sheet and a provisional budget).
It is important that the accounts mention the name of the NGO, the title of the document and the date of the financial year. The accounts must also be in Swiss francs.
A. Profit and loss account (income statement)
The income statement is an accounting document that summarizes all the expenses and income of an association for a given period. This document provides the net balance, i.e. what the association has gained (profit) or lost (loss) during the period. The result for this period is recorded in the balance sheet.
B. Balance sheet
The balance sheet describes the state and distribution of the association’s assets on a given date. It communicates the results of an activity.
C. Provisional budget
This is the forecast of expenses and income for the coming year. A budget is necessarily provisional. It is presented as an income statement, and must be balanced, i.e. the total income must be equal to the total expenditure. It is generally adopted by the annual general assembly and is requested when applying for financial support.
Model tables of profit and loss account, balance sheet and provisional budget
Swiss Gaap RPC standards
The aim of the Swiss GAAP RPC standards is to provide a consistent and transparent framework for the presentation of the annual accounts of small and medium-sized entities, as well as non-profit organizations.
Their application by NGOs is not mandatory, but an increasing number of NGOs are complying with these standards. This presentation gives a true and fair image of the assets, liabilities, financial situation and results of operations in order to improve, in particular, communication with donors and other stakeholders, while facilitating the comparability of annual accounts/financial statements between entities and over time.
The standard consists of a recommendation followed by an explanation, sometimes with examples and a glossary.
The RPC 21 standard, concerning the accounting of public utility non-profit organizations, is particularly relevant for NGOs.