Audit of common-benefit foundations
Foundations with an audit authority
According to article 552 § 27 PGR (hereinafter Art. 552 § 27 PGR), every common-benefit foundation subject to supervision must apply to the court to have a qualified and independent audit authority appointed. As an executive body of the foundation, the audit authority is under an obligation to verify once a year whether the foundation assets are being managed and appropriated in accordance with their purposes (for exceptions to the obligation to appoint an audit authority, see below).
Once the audit has been performed, the audit authority must submit a report each year to the foundation council and STIFA. If there is no reason for objection, it is sufficient to provide confirmation that the assets have been managed and appropriated in accordance with the purpose of the foundation and in conformity with the provisions of the law and the foundation documents. STIFA monitors timely submission of the reports of the audit authority, which must be within 9 months of the end of the business year.
If while performing its duties the audit authority ascertains circumstances which jeopardise the existence of the foundation, it also has to report on this. STIFA may demand from the audit authority disclosure of all facts of which it has become aware during the course of the audit.
It is important to bear in mind that not only an audit of the annual accounts and of accounting in the traditional sense is carried out, but beyond this also a review of the lawfulness and propriety of the foundation management. The audit authority reviews compliance with the foundation purpose, the appropriation and distribution of assets, the asset management, the accounting, and the organisation of the foundation.
The Liechtenstein Association of Auditors has issued a standard for the audit of common-benefit foundations (www.wpv.li).
Foundations exempt from the obligation to appoint an audit authority
In the case of common-benefit foundations, Art. 552 § 27(5) PGR provides the possibility of exemption from the obligation to appoint an audit authority. This possibility is not available to private-benefit foundations voluntarily placed under supervision. Grounds for exemption include especially a low amount of assets (article 5 StRV) and other grounds such as simple investment policy and appropriation of assets (article 6 StRV).
On application and after verifying that the prerequisites are met, STIFA issues a decree exempting the foundation from the obligation to appoint an audit authority. The exemption is entered in the Commercial Register and lasts until any revocation of the exemption by STIFA. The exemption may be revoked if the prerequisites for exemption are no longer met or also if necessary for a reliable assessment of the foundations’ asset situation (article 5 StRV).
Fact sheet
In the case of exempt foundations, STIFA exercises the right of inspection itself. The audit is generally carried out every three years. STIFA’s competence in this regard commences with the business year beginning after 31 December 2008. Foundations exempted pursuant to article 6(2)(b) StRV (simple investment policy and appropriation of assets) must additionally submit an abridged report on the past business year to STIFA each year by the end of the following March.
STIFA carries out the audit using its audit template, which is sent to the foundation in advance. This allows the foundation to prepare the records and key data. The act of foundation must be submitted to STIFA for inspection and accompanied by the foundation documents and resolutions of the foundation council as well as asset statements, bank and custody account statements, and account detail records for the years audited, along with the letter of representation with the legally valid signature of the foundation council.
Templates
Application for exemption from the obligation to appoint an audit office due to:
- a low amount of assets (article 5 StRV) « (German)
- simple investment policy and type of appropriation of assets (article 6(2)(b) StRV) « (German)
- Audit template « (German)
- Letter of representation « (German)
- Letter of representation_including liquidation« (German)
After the audit has been carried out, STIFA notifies the foundation in writing of the outcome of the audit. The audit fee is determined in accordance with article 13 StRV.
If STIFA identifies deficiencies, it applies for the Court of Justice to order appropriate measures where needed.
