Date posted: 09/02/2022

Joint submission on the IAASBs proposed standalone ISAs for LCEs

Our submission supports the development of a standalone standard, but we believe further refinements are required

The IAASB issued an exposure draft of their proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCEs), a standalone standard for use in the audits of less complex entities. Our joint submission with ACCA was lodged on 31 January.

We connected and received feedback from a wide range of our members, including participating in a number of virtual sessions with various member groups and obtaining feedback from members who perform LCE audits.

The key points of our submission:

  • We support the development of the ISA for LCEs to provide a framework for a consistent, efficient, high-quality audit that will still provide reasonable assurance. We believe it will have a positive impact on audit quality and the efficiency of the audit process for auditors, particularly SMPs when performing audits of LCEs.
  • The existence of a global standard for LCE audits versus the development of solutions in individual jurisdictions is important to support audit quality internationally. 
  • Our stakeholders identified a number of areas where there is need for further refinement of the proposed standard to address areas that will present challenges to successful implementation. In addition, we believe that the successful implementation depends on strong communication, education and change management.

Getting a less complex audit on the road

Article by Amir Ghandar on the proposals in the exposure draft.

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