The IAASB is proposing to: 

• Adopt the term “public interest entity” (PIE), as defined in the IESBA Code, in all the IAASB Standards
• Replace the extant defined term “listed entity” in all the IAASB Standards with a newly defined term in the IESBA Code “publicly traded entity”, and
• Extend all the differential requirements in the IAASB Standards (except one), that currently only apply to listed entities, to all PIEs.

The most notable impact would be requiring an engagement quality review (EQR) and the reporting of key audit matters (KAM) for a much broader group of entities. 

In our joint submission with the ACCA, we support aligning key terms and definitions used in the IAASB Standards and the IESBA Code, but we question the appropriateness of extending all the differential requirements in the IAASB Standards to PIEs. 

We recognise the importance of considering extending the engagements that are required to be subject to EQR, but we raise concerns around the potential impact on SMPs and conclude that local PIE definitions may need to be revisited in light of this. 

While we recognise that research shows important benefits of KAMs, consistent with the IAASB’s findings from its Auditor Reporting Post-Implementation Review, we believe that any extension of KAM to entities beyond listed entities should remain a jurisdictional decision.