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On 18 April 2024, experts discussed the main features of the ISA for LCE and presented case studies on how some European countries are planning to use the standard during IFAC, Accountancy Europe and EFAA for SMEs’ joint webinar, organized in collaboration with the IAASB. It brought together over 400 live participants, from over 120 jurisdictions.

Watch the full recording here.

Colorful opening slide for the Audit for LCE in Europe April 2024 event






In December 2023, the IAASB published the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE), a standalone, proportionate global auditing standard, designed and tailored specifically to the needs of smaller and less complex businesses and organizations.

Built on the foundation of the International Standards on Auditing (ISAs), audits performed using this standard provide the same level of assurance as audits performed using the ISAs: reasonable assurance. The standard is effective for audits beginning on or after 15 December 2025 for jurisdictions that adopt or permit its use. Early adoption is permitted.

Three figures and a chart on zoom for the April2024 Audit for LCE event


After a presentation of the main features of the ISA for LCE by the IAASB team, Christopher Arnold, Director at IFAC, moderated the experts’ discussion. This highlighted the benefits of the standard—both for auditors and SMEs—as well as potential challenges, and the need for clear communication and capacity building for its successful adoption and implementation.

Towards more Consistency, Efficiency and Clarity while Preserving Quality

“The current ISAs were perceived as too complex for the needs of LCEs and their auditors. As jurisdictions began to develop their own standards for auditing less complex entities, there were concerns of possible fragmentation and diverging standards, which led the IAASB to develop the new ISA for LCE,” explained Kai Morten Hagen, IAASB Member and the ISA for LCE Task Force Chair.

A man on zoom for the for the April2024 Audit for LCE event

Salvador Marin, President of the European Federation of Accountants and Auditors for SMEs said: “We congratulate the IAASB for producing a high-quality standard in such a short timeframe. We believe it will help ensure the viability of the LCE audit and serve the public interest by driving the consistency and quality of LCE audits, and, in turn, foster trust and confidence in LCE financial statements.”

A man on zoom for the April 2024 Audit for LCE event

This was echoed by Paul Gisby, Accountancy Europe’s Director for Professional Services, who added: “The new standard is an excellent step towards making LCE audits more efficient and effective.”

For Helene Agélii, Secretary General and CEO at the Nordic Federation of Public Accountants (NRF), “It’s important to note that this is not a simplified standard, but a tailored/customized standard drafted with a specific audit segment in mind. It will drive consistent application.”

ISA for LCE provides the same level of assurance—reasonable assurance—as the full ISAs,” concurred Inge Vanbeveren, Deputy Secretary General at the Instituut van de Bedrijfsrevisoren - Institut des Réviseurs d'Entreprises (IBR-IRE) in Belgium. “It is easier to understand and navigate, and more to the point, auditors don’t need to do a lot of ‘just in case’ actions and documentation based on uncertainty regarding how to apply the full ISAs in a scalable way,” stressed Helene Agélii, adding that “the standard is pedagogic and creates an understanding for the entire audit process.”

Three figures on zoom for the April 2024 Audit for LCE event


Experts also highlighted the benefits of the structure, layout and flow of the ISA for LCE -- which stands out for its readability, short length and navigability.

Facilitating Access to Finance & Opening New Business Opportunities for SMEs and SMPs

A woman on zoom for the for the April2024 Audit for LCE event

Iwona Warzecha, Senior Financial Management Specialist, REPARIS for SMEs Task Team Leader at The World Bank said: “SMEs often struggle to access financing and other services necessary for their business expansion, which is why accounting and auditing services are vital for their success. The new standard for less complex entities is a timely response to the increasing need for reasonable assurance and audit reports for SMEs.”

“These audit reports can open doors to new business opportunities, including access to credit, financing, capital, and investment proposals. They can help SMEs elevate their businesses to the next level if they have an appetite for growth,” she noted.

Inge Vanbeveren recalled that understanding the scope is key: “The ISA for LCE is designed for less complex entities, which includes a broader range of businesses beyond just micro-sized companies. It recognizes the importance of smaller businesses and their specific audit needs.”

Helene Agélii highlighted that “This new standard also presents a great opportunity for small and medium-sized practices (SMPs) to provide audit services in a more efficient and effective manner. Since the structure of the standard follows the audit process SMPs can be more confident in performing the expected work effort to address the requirements, thereby greatly reducing the uncertainty that comes from applying the much more complex ISAs.”

She added that “the introduction of user-friendly audit tools based on the new standard can also contribute to the attractiveness of the profession, incentivizing the new generation to join the auditing profession.”

Adoption and Implementation: Support from Regulators Is Key

Jasper van den Hout, Director, IAASB said: “As with the full set of ISAs, decisions about the required or permitted use of the IAASB’s auditing standards in individual jurisdictions rest with legislative or regulatory authorities or relevant local bodies with standard-setting authority. Firms will also need to create their own policies or procedures for use of the standard.”

“We must ensure that regulators, regional and national, professional accountancy Organizations, SMPs, SMEs and the wider public understand that this standard will provide the basis for an audit of equivalent quality to an audit performed using the ISAs,” said Salvador Marin.

Helene Agélii concurred. “One precondition for using the standard is the support from [the] regulator. In Sweden, Norway, and Finland the regulators are all very supportive, while in Iceland the regulator has not yet announced their view. [* Editor’s note: the day after the webinar Helene received confirmation that also the LCE standard can be applied in Iceland as from this year].  In Denmark, the situation is a bit different as there are two audit thresholds among which you can chose between having an audit or an extended review, so there is not the same urge to focus on ISA for LCE,” she noted.

Inge Vanbeveren said: “In Belgium, there is a specific standard applicable to the non-statutory audit of SMEs since 2019, introduced because there was a growing demand for ‘scalability of the ISAs’. Based on the ISAs, we have identified the aspects that are core to an SME audit. We are now doing this exercise again, making a comparison between the ISAs and ISA for LCE, and we conducted a SWOT-analysis to have a clear understanding of what the application of ISA for LCE could mean in Belgium.”

The discussions underlined the nuances involved in different jurisdictions’ decision-making processes, and highlighted some of the potential challenges that could arise: for example, in the authority of the ISA for LCE, including determining quantitative thresholds and the qualitative characteristics, as well as the potential impact on audit fees.

Multistakeholder Approach, Communication, Capacity Building & Training

Isabelle Raiche, Senior Manager, IAASB highlighted the various resources developed by the IAASB covering the standard's purpose, authority, structure and associated benefits, including a new video series on exploring the benefits, applicability and use, and a step-by-step walkthrough. She also noted that the following resources will be published by the IAASB in Q2 and Q3 2024:

  • Supplemental Guide on the Authority
  • Supplemental Guide on Reporting
  • First time implementation Guide
  • Adoption Guide

All experts agreed that clear communication, capacity building and training will be crucial to avoid misconceptions and ensure buy-in from all parties involved. The adoption and implementation journey will require all stakeholders.

Paul Gisby, said: “Although it is a high-quality standard, the success of the ISA for LCE will be measured by its acceptance and adoption. The main key success factor will be the communication efforts to get the buy-in from all stakeholders, including users—such as financial institutions and lenders—and, of course, local regulators, standard setters, and audit oversight bodies.”

Inge van Beveren recommended to “open a dialogue with users of financial statements to understand any concerns and explain how the ISA for LCE meets their needs for reliable financial information.” To help understanding and build trust in the audit quality, she also called for “transparency about the audit process and the standard used” and to demonstrate competence in “showing through the audit work and documentation that the auditors have the necessary skills and knowledge to apply ISA for LCE effectively.”

For Iwona Warzecha, “To successfully implement this new standard, a roadmap is needed, including capacity building for auditors, quality assurance staff, regulators, investors, training providers, and other users.” She added that “The World Bank's regional programs, such as REPARIS for SMEs, can be utilized to disseminate and raise awareness about the new standard among country stakeholders. This includes government officials, PAOs, chambers of commerce, and public oversight bodies.”

The crucial role of the PAOs in supporting adoption and implementation was also highlighted by Helene Agélii, who shared that in Sweden, Norway and Finland, the institutes are about to finalize the translation** of the standards and have already started preparing for training opportunities [**Editor’s note: the translation in Finnish is now available).

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Accountancy Europe


World Bank

Christopher Arnold


Christopher Arnold is a Director at the International Federation of Accountants (IFAC). He leads activities on contributing to and promoting the development, adoption and implementation of high-quality international standards, including the Member Compliance Program, Intellectual Property and Translations. Christopher is also responsible for IFAC’s SME (small- and medium-sized entities), SMP (small- and medium-sized practices) and research initiatives, which include developing thought leadership, public policy and advocacy. He was previously an Audit Manager for Deloitte and qualified as a professional accountant in a mid-tier accountancy practice in London (now called PKF-Littlejohn LLP). Christopher started his career as a Small Business Policy Adviser at the Association of Chartered Certified Accountants (ACCA).


Cecile Bonino
Cecile Bonino

Principal, Global Engagement

Cecile Bonino is Principal of Global Engagement for IFAC. She bridges global organizations' relationship management, policy support, event management, and brand awareness. A lawyer by education, Cecile has 20 years of experience in public affairs and public relations. Before joining IFAC, Cecile worked for 13 years at ACCA, where she headed EU Affairs and the ACCA Brussels office, working with European decision and policymakers, Media and key influencers, as well as global organizations. Prior to this, Cécile worked as a consultant in financial services, energy, environment, and climate change at Weber Shandwick and as Environment and Legal Affairs adviser at the European Landowners Organisation. At the beginning of her career, Cécile also worked at the DG TRADE of the European Commission, the DG Development of the College of Europe, and the law firm, Gide Loyrette Nouel. In 2012, Cécile won the ‘Public Affairs Professional of the Year’ prize at the European Public Affairs Awards.

Harun Saki
Harun Saki

Senior Manager

Harun Saki is a Senior Manager at Accountancy Europe and the Head of Assurance. He engages in various projects related to auditing & assurance and specialises in international standards on auditing and professional ethics. Before his role at Accountancy Europe, he worked as a public sector auditor at the Turkish Court of Accounts (2008-2014) and then as a financial auditor at the International Board of Auditors for NATO (2014-2019). He is a Certified Management Accountant (CMA) and Certified Information Systems Auditor (CISA). Harun has a master’s degree in Banking and Finance and is married with two daughters.

Paul Thompson

Technical Director, European Federation of Accountants and Auditors for SMEs

Paul Thompson is EFAA Technical Director and a consultant dedicated to thought leadership and development of the global accountancy profession. Mr. Thompson also serves on the International Accounting Standard Board's SME Implementation Group and is a member of Nottingham University Business School Malaysia’s Industry Advisory Board, an advisory group providing strategic advice to the Business School. He  also advises developing professional accountancy organizations in Europe and Asia.

From 2004 to 2016 Mr. Thompson worked for IFAC, latterly as a director, overseeing support of small- and medium-sized practices and professional accountants in business, research and innovation, and the Knowledge Gateway.

Prior to his work with IFAC, Mr. Thompson worked for Touche Ross & Co., London before going on to lecture on corporate reporting and analysis at universities in the UK, Singapore, and Malaysia. He has a number of publications in academic journals and the professional press in the areas of ethical finance, corporate reporting, corporate governance, integrated reporting, practice management and the future of the profession.

Mr. Thompson graduated from the University of Warwick with a bachelor of science in accounting and financial analysis and is a fellow of the Institute of Chartered Accountants in England and Wales.