Narrow Scope Amendments to the ISQMs, ISAs and ISRE 2400 (Revised) Published
The International Auditing and Assurance Standards Board (IAASB) has released narrow scope amendments to its standards revising the definition of listed entity to align with the definition in the International Ethics Standards Board for Accountants’ (IESBA) Code of Ethics for Professional Accountants (including International Independence Standards). The new definition will amend the International Standards on Quality Management and International Standards on Auditing. In addition, amendments to International Standard on Review Engagement 2400 (Revised), Engagements to Review Historical Financial Statements, aim to align with the IESBA Code of Ethics regarding certain public disclosures about the application of independence requirements.
The narrow scope amendments:
- Adopt the same definition of publicly traded entity (PTE) in the ISQMs and ISAs as adopted in the IESBA Code of Ethics, while recognizing the role local standard setters and regulators play in defining PTEs for their jurisdictions.
- Incorporate an overarching objective for differential requirements for PTEs in the ISQMs and ISAs and a framework for when it may be appropriate to apply such requirements to other entities.
- Amend the applicability of the existing requirements for audits of listed entities to apply to audits of PTEs.
- Add a new requirement in ISRE 2400 (Revised) for public disclosure in the practitioner’s review report when the practitioner applied independence requirements specific to reviews of financial statements of certain entities, e.g., for public interest entities.
Throughout the development of these amendments, the IAASB maintained close collaboration and coordination with IESBA, striving to align key concepts in the IAASB’s and IESBA’s standards, to the greatest extent possible.
To assist its stakeholder understanding and implementing the narrow scope amendments, the IAASB has published a Basis for Conclusions, available on its website here.
Effective Date and Resources
The narrow scope amendments become effective for engagements for periods beginning on or after December 15, 2026. This effective date is aligned with the effective dates for the IAASB’s recently revised standards on going concern and fraud, ISA 570 (Revised 2024) and ISA 240 (Revised), respectively. Together, these standards provide a stronger, more coordinated response to the risks of fraud and financial distress.
About the IAASB
The International Auditing and Assurance Standards Board develops auditing, assurance, related services, and quality management standards and guidance in the public interest that support consistent performance of quality engagements. Along with the International Ethics Standards Board for Accountants, the IAASB is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board oversees IAASB and IESBA activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.