Integrated Thinking and Acting – An opinion paper by the University of St. Gallen and PwC Switzerland

Integrated management control in the context of modern performance management systems

Financial performance is of vital importance to the senior management of a company. Non-financial performance, however, often lurks in the shadows and is relegated to specialised departments such as the accounting department, or treated as a separate part of sustainability. The results of our survey show that such an approach is counterproductive. Senior managers interested in long-term value creation and success must take into consideration the concerns of their company’s various stakeholders, and identify financial as well as non-financial value drivers. Long-term value creation and success not only depend on the identification of key value drivers, but also, in particular, on the establishment of a performance management system that allows for controlling these drivers. The results of our survey show that there is an expectation gap in this context.

The message is clear: the more intensively senior management is involved in the modification of a performance management system, the greater its acceptance and usefulness for decision-making. Higher decision quality, in turn, is positively linked to performance. Senior management members should therefore ask themselves how they can take into account (and manage) all the key aspects, of both a financial and non-financial nature. Integrated thinking and acting create added value, counteract a silo mentality and render a separate sustainability department unnecessary: medium and long-term value creation is enabled by integrated thinking and acting. A strategic commitment is required from management so that key aspects are linked to strategy and not outsourced to operational units.

We are pleased to be able to share the main findings of the survey based on a questionnaire that was designed and distributed by PwC in association with the professors of the Accounting department at the Institute for Public Finance, Fiscal Law and Law and Economics of the University of St. Gallen. The goal of the St. Gallen researchers (led by Prof. Dr. Thomas Berndt and Tobias Müller) and the PwC team (under the direction of Peter Eberli and Stephan Hirschi) was to gain valuable insights into the organisation of performance management systems and the external stakeholder management of the participants, and to draw conclusions from the information that was gathered.

As senior managers (from CEOs to heads of risk management) from a variety of different fields and a wide range of companies took part in the survey, we consider the survey for companies in Switzerland to be meaningful. Firms from the financial sector had the largest voice, with over 40% of the participants coming from this field.

This publication is designed to provide a comprehensive overview of our findings, which are divided into the following sections:

  1. Private standard setters and regulation
  2. Performance management systems
  3. Relationship between financial and non-financial performance
  4. Importance of modern performance management systems
  5. Usefulness of standards and frameworks
  6. Success through integrated thinking and acting


Read the paper


Peter Eberli
Assurance Partner
Technical Accountant Leader IFRS 17
Office: +41 58 792 28 38

Stephan Hirschi
Advisory Director
Office: +41 58 792 2789

Raphael Rutishauser
Assurance & Advisory Senior Manager
Office: +41 58 792 5215

Enhanced auditor’s report: towards trust and transparency

The new auditor’s report required by Swiss legislation is designed to be more informative and insightful, and give the stakeholders of reporting entities greater assurance. We at PwC welcome the new reporting requirements as an opportunity to unlock the ‘black box ’of what we actually do as auditors and increase trust in our role.

We also realise, though, that the new reports and their potential impact on governance have to be discussed and understood – not only by the auditors who produce them, but by reporting entities and their stakeholders, from shareholders to regulators. For this reason we’ve produced a short flyer explaining the major changes and their implications, including a commented overview of the structure of the new report.

You can read the flyer via the link below. Feel free to contact us if you’d like to discuss the new auditor’s report and its implications in more detail.

Download flyer


Swiss GAAP FER checklist for consolidated and stand-alone financial statements

Swiss GAAP FER is a recognised financial reporting standard in Switzerland according to art. 962 Swiss Code of Obligation. This checklist allows users to review the completeness of the disclosures in the financial statements prepared according to Swiss GAAP FER. It covers all requirements of the currently applicable Swiss GAAP FER standards (status 10 December 2014).

The checklist follows the modular structure of Swiss GAAP FER. It is structured in relation to the items in the financial statements and differentiates between the core FER and the other standards of the FER as well as the special requirements for consolidated financial statements and for listed companies.

You can download the file here.

PwC at the forefront of new auditor reporting

PwC recently issued the first auditor’s report in Switzerland under the new reporting requirements. The IAASB (International Auditing and Assurance Standard Board) issued these requirements in response to a demand for more informative auditor reporting in the wake of the financial crisis.

The new auditor’s report constitutes a revolution in auditing – it’s a game-changer for shareholders, investors, clients and the audit profession and goes beyond just a redesigned boilerplate report. The reports will help organisations and their auditors to build trust in the capital markets and to enhance the reputation of all involved.

Greater insight and transparency

The most significant innovation involves the ‘key audit matters’. This new section of the report sheds light on matters that, in the auditor’s judgment, were of most significance in the audit of the financial statements of the current period. It also describes how the auditor addressed these matters. This bespoke description of key areas of focus in the audit gives the auditor an opportunity to provide meaningful comments and explanations.

Going concern also receives more visibility in the new auditor’s report. Both the management’s and the auditor’s responsibilities regarding going concern are included.

We believe these changes will help translate the new reporting requirements into added transparency and trust – to the lasting benefit of our clients and their stakeholders.

In Switzerland, this new reporting requirement will come into full effect for audit reports for financial statements of listed companies for period ending on or after 21 December 2016, but early application is permitted. This new reporting style is already in place in the UK and the Netherlands.

For further information read our Disclose article.

Please contact Matthias Jeger or your usual PwC contact if you have any questions or wish to discuss these or other aspects of the new auditor’s report.


The audit committee

A practical guide for audit committee members on the requirements and responsibilities of the audit committee.

In this publication, we summarise the current legal, regulatory and de facto provisions as well as the daily routine of the audit committee. In the process, we shine a light on a variety of aspects concerning the audit committee in all of the economic sectors relevant to Switzerland, from industrial undertakings to financial institutions.

Read more…
The audit committee