Internal Audit Engagement Letter Template for Switzerland

The Internal Audit Engagement Letter is a crucial document used in Swiss organizations to formally establish and define the internal audit function's role, responsibilities, and authority. This document is essential when setting up a new internal audit function, changing the scope of existing internal audit services, or engaging an external provider for internal audit services. It must comply with Swiss corporate law requirements, particularly those relating to internal control systems and corporate governance. The letter typically includes detailed information about audit scope, methodology, reporting lines, and access rights, while ensuring alignment with both Swiss regulatory requirements and International Standards for the Professional Practice of Internal Auditing. It's particularly important in regulated industries where internal audit functions are mandatory under Swiss law, and serves as a reference document for both the audit team and organizational stakeholders.

1. Letterhead and Date: Internal audit firm's details, recipient details, and date of the letter

2. Addressing and Salutation: Formal addressing to the appropriate authority (typically Board of Directors or Audit Committee)

3. Engagement Purpose: Clear statement of the purpose of the internal audit function and its role within the organization

4. Scope of Services: Detailed description of the internal audit services to be provided, including the audit areas, nature, and extent of work

5. Professional Standards: Reference to IIA Standards and Swiss regulatory requirements being followed

6. Independence and Objectivity: Statement confirming the internal audit function's independence and objective position

7. Responsibilities: Clear delineation of internal auditor's and management's responsibilities

8. Reporting Structure: Description of reporting lines and communication protocols

9. Access to Information: Statement regarding required access to records, personnel, and physical properties

10. Confidentiality: Commitment to maintaining confidentiality of information

11. Timeline and Resources: Overview of engagement timeline and resource allocation

12. Professional Fees: Fee structure and payment terms if applicable

13. Signature Block: Space for signatures of both parties