Input sought from CAs on proposed ISA for LCEs
ICAS seeks views on the IAASB’s proposed ISA for LCEs
In July 2021, the International Auditing and Assurance Standards Board (IAASB) issued an exposure draft (ED) of a proposed International Standard on Auditing (ISA) for audits of financial statements of less complex Entities (LCEs). The IAASB has been undertaking various outreach as it seeks to gain as much feedback as possible to inform its views as to the way forward following the end of the consultation period which closes on 31 January 2022. Supporting material, including videos is also available on the IAASB website. The length of the consultation period illustrates the importance of this consultation.
The new proposed stand-alone standard for audits of less complex entities:
- Is designed specifically for audits of less complex entities
- Is based on the underlying concepts from International Standards on Auditing
- Was developed to be understandable, clear and concise
- Is intended to reduce the risk of jurisdictional divergence by driving consistency and comparability globally
- Is intended to achieve a quality audit engagement
A detailed summary of the proposed standard can be found in a previous article.
ICAS will be responding to the consultation which has a deadline date of 31 January 2022. That response is being led by the ICAS Audit and Assurance Panel which includes representatives from different sizes of audit firm, industry, internal audit and the public sector.
Given the importance of this consultation any member who would like to share their views on the ED-ISA for LCE should send these to members@icas.com FAO James Barbour by 31 December 2021. Views are sought from any members who have an interest in this development, including those in audit firms, industry and users of the financial statements of LCEs.
The IAASB and the International Federation of Accountants (IFAC) have also issued a survey to provide an alternative means to feed in views to the consultation. This survey contains 21-25 questions and should take approximately 20-30 minutes to complete. It covers the following key areas of the ISA for LCEs:
- Overarching Positioning of ED-ISA for LCE
- Authority (or Scope) of the Standard
- Key Principles Used in Developing ED-ISA for LCE
- Content of ED-ISA for LCE
- Other Matters
- Group Audits
The survey closes on 14 January 2022.
Ultimately, the decision on whether any future finalised standard would be introduced in the UK lies with the Financial Reporting Council.