Less Complex Entities (LCEs)

Less complex entities (LCEs) make crucial contributions to the world economy and account for the great majority of entities globally. At the same time, increasingly complex structures and transactions need to be addressed in the International Standards on Auditing (ISAs). This complexity in the ISAs can pose challenges for audits of less complex entities.

Based on the feedback from a discussion paper and outreach, the International Auditing and Assurance Standards Board (IAASB) has developed an Exposure Draft named Proposed International Standard on Auditing of Financial Statements of Less Complex Entities (ED ISA for LCE) that is proportionate to the typical nature and circumstance of an audit of a less complex entity and is responsive to those stakeholders’ challenges. It offers a global solution at a time where several jurisdictional-specific less complex entity standards are emerging, which is not in the public interest.

The public consultation on this draft new standard is open until 31 January 2022.