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IAASB Issues Proposed Standard for Group Audits Within Less Complex Entities

S.J. Steinhardt
Published Date:
Jan 25, 2023

The International Auditing and Assurance Standards Board (IAASB) has reconsidered its earlier decision to exclude group audits from the larger standard for auditing less complex entities, and has issued a new proposal for a standard that would include such a section, Accounting Today reported

The IAASB issued an exposure draft for an international standard on auditing for less complex entities (ISA for LCE) in July 2021. That proposal excluded group audits “because the IAASB … had the view that group audits inherently exhibited characteristics of complexity within an entity and, consistent with other areas of complexity, had not been contemplated in the design of the proposed standard,” the new proposal read. 

The new proposal acknowledges that “participants of outreach activities showed strong support for the inclusion of group audits. Therefore, the IAASB reconsidered its decision to exclude group audits from the scope of the [original proposal].” The IAASB explained that, "taking into account the examples of less complex groups provided by respondents to ED-ISA for LCE and the revised definitions in ISA 600 (Revised), not all group audits inherently exhibit characteristics of complexity and supported the inclusion of certain group audits in the scope of proposed ISA for LCE."

The proposed section would form part of the proposed ISA for LCE when finalized. Along with  the inclusion of group audits, the IAASB is also proposing changes to the authority of the proposed ISA for LCE, Accounting Today reported.

Comments on the exposure draft are due by May 2, 2023. Respondents are asked to submit their comments electronically through the IAASB website, using the “Submit Comment” link. The IAASB also asked respondents to  submit comments in both a PDF and Word file. First-time users must register to use this feature. All comments will be considered a matter of public record and will ultimately be posted on the website.

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