The International Auditing and Assurance Standards Board (IAASB) has issued a Discussion Paper (DP) exploring possible options to address the challenges in applying the International Standards on Auditing (ISAs) for audits of less complex entities. 

In recent years there has been an increase in audit practitioners raising concerns relating to the complexity and difficulties in applying the auditing standards to audits of small entities and expressing a need for urgent global action. It is a significant issue in Australia and New Zealand, where we have a large and important cohort of small audit practitioners, particularly in regional areas.

In recent years, practitioners have raised concerns around the complexities of applying the auditing standards to the audits of less complex entities. The approach to these entities is particularly important in New Zealand and Australia where we have large cohorts of small audit practitioners and less complex entities.

Professor Roger Simnett AO - AUASB Chair, IAASB Member and Chair of the IAASB Less Complex Entity Working Group and Matthew Zappulla - AUASB Technical Director and IAASB Technical Advisor, provide some background to the challenges of auditing LCEs and an overview of the IAASB’s project and the options explored in the discussion paper so that members can have their say on this issue.