The Association of Chartered Certified Accountants (ACCA) has proposed that the International Standards on Auditing (ISAs) should be drafted using simpler language and a simpler structure.

In its report, Thinking Small First, which is a response to concerns that ISAs can be burdensome when applied to the audits of some smaller and less complex entities, the ACCA suggested that ISAs should start with the most basic requirements and then build upon these.

The report noted that some accountants are worried that the auditing standards can be difficult to apply when auditing certain smaller or less complex companies and that some practitioners believe certain standards require procedures which are unnecessary. This leads to concerns that in these circumstances, regulators will expect the requirements of auditing standards to be followed ‘regardless of their appropriateness’.

This has led to propositions of allowing smaller companies to be exempt from audit or creating a separate set of standards for those audits.

Instead, the ACCA has proposed that auditing standards be written using simpler language and in a simpler structure. A common complaint about auditing standards is their tendency to scale down, rather than scale up: standards set requirements as if the user is an auditor of a larger entity, with the expectation that SME auditors will do less.

The ACCA head of audit and assurance Andrew Gambier said: “We believe simpler language and simpler structure would benefit all auditors. Auditing standards could be more easily understood, with auditors able to identify more quickly the requirements that apply to their specific situation. It would also be of benefit to the audit regulators and for the general public in terms of their understanding of audit.

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“An important factor in audit quality is that the public need to have confidence that standards are being maintained. The public want audit to work, and work well. ACCA’s position is that it is preferable to hold a unitary approach to audit, while ensuring the rigour of audit is sustained.”

The report comes as the International Auditing and Assurance Standards Board is set to consult on its strategy from 2020 to 2023.