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The International Auditing and Assurance Standards Board (IAASB) issued the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) in December 2023.
Built on the foundation of the International Standards on Auditing (ISAs), the ISA for LCE is a standalone global auditing standard designed specifically for smaller and less complex businesses.
- It is a standalone standard that is proportionate and tailored to the specific needs of an audit of less complex entities, which makes it easier to navigate for those practitioners who support these types of engagements.
- It provides the same level of assurance as an audit performed under the ISAs: reasonable assurance.
- It will help maintain confidence in financial reporting and promote the consistent application of auditing standards to LCEs, which reduces the risk of jurisdictional divergence by driving consistency and comparability globally.
- It recognises the importance of smaller businesses and their specific audit needs.
Please click here for the standard and available resources.
Through outreach activities conducted by ISCA on the exposure draft of the ISA for LCE, mixed feedback was received on the usefulness of the standard. Hence, ISCA will be seeking feedback from the profession on the adoption of the standard in Singapore.
A new video series has been released by the IAASB to help stakeholders understand, implement and use ISA for LCE:
- Exploring the Benefits: Learn more about the objectives, benefits, and its distinguishing features compared to the full suite of ISAs.
- A Closer Look at Applicability and Use: Understand the conditions under which the standard can be applied, including the role of legislative and regulatory authorities.
- A Step-by-Step Walkthrough: Gain an in-depth understanding of the standard’s design principles, structure, and content layout.
A global webinar will also be held by the IAASB to provide a comprehensive overview of ISA for LCE.
In addition to the webinar and video series, the IAASB will also be issuing supplementary guidance, a fact sheet on adoption and a first-time implementation guide in 2024.