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ISA for LCE: A Standard for Audits of Less Complex Entities

International Standard on Auditing for Audits of Financial Statements of Less Complex Entities, known as the ISA for LCE, is a pioneering standard  and significant milestone, addressing the unique needs of audits of smaller and less complex businesses.

The ISA for LCE is a standalone global auditing standard designed specifically for smaller and less complex businesses. Built on the foundation of the International Standards on Auditing (ISAs), audits performed using this standard provide the same level of assurance for eligible audits: reasonable assurance.

  • ISA for LCE

    The ISA for LCE is a standalone global auditing standard designed specifically for smaller and less complex businesses.

    • It is standalone standard that is proportionate & 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 recognizes the importance of smaller businesses and their specific audit needs.
  • The Authority: When Can the ISA for LCE Be Used?

    The ISA for LCE can be used in jurisdictions that have adopted the standard.

    It is the nature of the business that determines if this standard can be used. Are the business activities, organizational and ownership structures, finance function, technology, accounting & reporting less complex?

    It also cannot be used by entities that are listed or have public interest characteristics.

    See the standard for further details on when the ISA for LCE can be used.

  • Available Resources

    A version of the ISA for LCE presentation deck with speaking notes is available upon request. Please email IAASBcommunications@iaasb.org.

  • Coming in 2024

    To support adoption and implementation of this new standard, during the first half of 2024 the IAASB will issue additional materials.

    • Q1 2024: Supplemental guidance on the Authority
    • Q1 2024: Fact sheet on adoption
    • Q1: Videos detailing aspects of the standard, including the Authority and a walk-through
    • March 2024: Webinar on scope/authority and general guidance
    • Q2 2024: Supplemental guidance on Reporting
    • Q2 2024: First-time implementation guide

    All new materials will be included on this web page.