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Why an auditing standard for less complex entities is needed
Katharine Bagshaw, Technical Manager, Auditing Standards, says an auditing standard must be prioritised, and fast
In December 2020, Michael Izza, Chief Executive of ICAEW, wrote an open letter on behalf of ICAEW to the International Auditing and Assurance Standards Board (IAASB), the international auditing standard-setter. In the letter, Izza urged IAASB to develop its proposals for an auditing standard for less complex entities (LCEs) quickly. He also set out what ICAEW believes the standard-setter should do differently to make sure that the standard actually works.
The vast majority of the world’s smaller entities are ‘less complex’, and a workable auditing standard for them is in the public interest. Without it, there is a risk that different jurisdictions will go their own way.