AUASB releases Consultation Paper for Audits of Less Complex Entities

Tuesday, September 14, 2021

The Australian Auditing and Assurance Standards Board (AUASB) has released a Consultation Paper seeking public comment by 14 January 2022 on the IAASB’s new stand-alone standard for Audits of Financial Statements of Less Complex Entities, as well as Consideration of Possible Alternative Options for Australian LCE Audits

The AUASB recognises the importance of the new international proposals for audits of Less Complex Entities and the AUASB Consultation Paper will provide an overview of how the AUASB is requesting feedback from Australian stakeholders on the proposed new standard. 

The IAASB considers the new stand-alone standard for audits of less complex entities:

• Is designed specifically for audits of a less complex entities
• Is based on the underlying concepts from International Standards on Auditing
• Was developed to be understandable, clear and concise
• Reduces the risk of jurisdictional divergence by driving consistency and comparability globally
• Will achieve a quality audit engagement

Additionally, and importantly the AUASB recognises that there are a range of factors driving challenges that impact the audit environment for LCEs which are not associated specifically with the auditing standards.  The AUASB recognises more work is needed to address such issues, and to also consider how they impact the audit environment for LCEs.  In addition to obtaining responses on the IAASB’s LCE exposure draft this Consultation Paper seeks feedback on possible alternative options for Australian LCE audits.

The links to the aforementioned documents are provided below:

1. Consultation Paper Exposure of the IAASB’s Auditing for Audits of Financial Statements of Less Complex Entities as well as Consideration of Possible alternative options for Australian LCE Audits.
2. IAASB Proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities

Stay alert to the AUASB’s website for news of our LCE Outreach Plans – your views about the proposed LCE standard and possible alternative options for Australian LCE audits are valuable to us.

Our first awareness webinar will take place in the first week of October 2021, with virtual roundtables to follow later in October and November 2021.  Now is the time that the AUASB can influence the direction of the ISA for LCE Standard and additionally, focus on what other options can be further investigated to assist Australian stakeholders in the area of Less Complex Entities.

Any queries about the Consultation Paper and the AUASB’s associated outreach activities should be directed to Rene Herman, AUASB Deputy Technical Director, at [email protected]