The International Auditing and Assurance Standards Board (IAASB) has published the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities, known as the ISA for LCE.

The ISA for LCE is a standalone global auditing standard designed specifically for smaller and less complex businesses and organisations.

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

IAASB chair Tom Seidenstein said: “The ISA for LCE underscores the IAASB’s commitment to ensuring the credibility and reliability of financial reporting for entities of all sizes. By leveraging the International Standards on Auditing as our starting point, we are cultivating an environment where audits are performed in a globally consistent and high-quality way for the smallest entities. The IAASB’s actions seek to inspire greater confidence and contribute to the overall stability and trustworthiness of information in the external reporting ecosystem. We have also heard that this standard should provide an impetus for the evolution of auditing in developing economies.

“We now turn to each jurisdiction and their oversight authorities and regulators to decide whether to adopt the standard. We encourage practitioners and others to reach out to the authorities in their jurisdictions to advocate for the ISA for LCE’s adoption.”

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