The International Auditing and Assurance Standards Board (IAASB) has opened a public consultation on proposed changes to its International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE).
The revisions are intended to keep the LCE auditing standard proportionate and globally applicable, the standards body said in a statement.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The IAASB said the draft changes are focused on updating the ISA for LCE for new requirements on fraud and going concern, without losing its specific focus on the needs and circumstances of less complex entities.
IAASB chair Tom Seidenstein said: “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.
“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 proposes changes in several key areas.
It incorporates recent updates to auditors’ responsibilities relating to the risk of fraud in financial statements.
On going concern, it reflects revised expectations of auditors’ work in assessing whether an entity can continue as a going concern.
The draft also proposes replacing the term “listed entity” with “publicly traded entity”.
In addition, the proposals aim to retain alignment 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 is a stand-alone global auditing standard developed specifically for audits of less complex entities.
The IAASB noted that since its issuance, more than 30 jurisdictions have adopted the ISA for LCE, with a number of others currently considering adopting or permitting its use.
The board is also seeking views on how frequently and in what time frame the ISA for LCE should be updated in future. Comments are requested by 17 November 2026.
