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IFAC Supports New IAASB Audit Standard for Less Complex Entities and Encourages Jurisdictions to Consider Adoption

Dec 7, 2023 | New York, New York | English

The International Federation of Accountants (IFAC), which comprises 180 member organizations and represents millions of professional accountants globally, congratulates the International Auditing and Assurance Standards Board (IAASB) on its new standalone standard for audits of less complex entities. The International Standard on Auditing for Audits of Financial Statements of Less Complex Entities, known as the ISA for LCE, is proportionate and tailored to the nature and circumstances of audits of smaller and less complex entities. Built on the foundation of the International Standards on Auditing (ISAs), it contains all the requirements necessary to obtain reasonable assurance.

IFAC CEO Kevin Dancey said: “IFAC has closely engaged with the IAASB throughout development of the ISA for LCE and provided extensive feedback on behalf of practitioners around the world. Our support is driven by the importance of less complex entities to all economies and our consistent understanding of the urgent need for action at the global level to address the significant risk of fragmentation to the international standard-setting ecosystem due to national and regional initiatives.”

Now that the ISA for LCE has been issued, IFAC encourages its member organizations to adopt or advocate for adoption of the ISA for LCE in their jurisdictions or promote voluntary use of the standard. IFAC’s member organizations—professional accountancy organizations (PAOs) around the world—are essential to how international standards are adopted and implemented given their relationships with the regulators and oversight bodies that often have ultimate or shared adoption authority.

In 2024, IFAC will begin gathering data about potential adoption plans and evaluations at the jurisdiction level, with the intention of reporting examples and other relevant data in the future as it does with other international standards and best practices that IFAC member organizations are required to adopt, implement, and report on. IFAC will also continue to closely coordinate with the IAASB on its adoption and implementation activities, including collaborating on global webinars and consideration of any future materials.

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associates in more than 135 jurisdictions, representing millions of professional accountants in public practice, education, government service, industry, and commerce.