IAASB Proposes Targeted Revisions to the ISA for Audits of Less Complex Entities

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The International Auditing and Assurance Standards Board (IAASB) has released the Exposure Draft (ED) on proposed revisions to the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) for public consultation.

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.

Revisions are proposed 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 consultation seeks stakeholder feedback, by 17 November 2026, 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.