Exposure Draft Maintains the Standard’s Relevance through Proportionate Updates
The International Auditing and Assurance Standards Board (IAASB) today released for public consultation proposed revisions to the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE).
The proposed revisions are part of the IAASB’s commitment to maintaining a robust, proportionate, and globally relevant auditing framework for less complex entities. The proposed revisions update the ISA for LCE to address significant developments related to fraud and going concern, while ensuring the requirements remain appropriately tailored to audits of less complex entities.
“The IAASB designed the ISA for LCE to deliver an appropriately tailored, high-quality audit standard for less complex entities while maintaining the same objective as the ISAs: obtaining reasonable assurance,” said Tom Seidenstein, IAASB Chair. “These proposed revisions demonstrate our commitment to keeping the standard current and responsive to developments in auditing while ensuring it continues to address evolving public interest expectations in a way that remains proportionate for audits of less complex entities.”
The Exposure Draft includes proposed updates in several areas, including:
- Fraud – Incorporating recent revisions to auditor responsibilities relating to fraud.
- Going Concern – Addressing recent developments in auditor responsibilities related to going concern.
- Listed and Public Interest Entities – Replacing the term “listed entity” with “publicly traded entity”, for which use of the standard is prohibited.
- Experts – Maintaining interoperability with the International Code of Ethics for Accountants (including International Independence Standards), issued by the International Ethics Standards Board for Accountants.
The ISA for LCE provides a standalone global auditing standard designed specifically for audits of less complex entities. It promotes consistent, high-quality audits while responding to the unique characteristics of less complex entities. In the short period since the standard’s issuance, more than 30 jurisdictions have adopted the ISA for LCE, and several additional jurisdictions are actively considering its use.
The IAASB is seeking stakeholder feedback on whether the proposed revisions maintain the relevance of the ISA for LCE by addressing significant developments in a proportionate way that reflect the typical nature and circumstances of audits of less complex entities. The IAASB is also seeking input on the timeframe for future maintenance of the ISA for LCE.
Request for Comments
The IAASB welcomes feedback from auditors, regulators, oversight authorities, national standard setters, preparers, investors, and other stakeholders by November 17, 2026.
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.