The International Auditing and Assurance Standards Board (IAASB) has released new supplemental guidance on auditor reporting as it relates to the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities, known as the ISA for LCE. Meant to be read with the ISA for LCE, the new guidance provides assistance for auditors about modifications to the auditor’s report when using the standard. The guidance also includes information on using emphasis of matter and other matter paragraphs, reporting on other information, and reporting on a material uncertainty related to going concern.
Additionally, the guidance features eight illustrative auditor’s reports, including examples of adverse opinions, disclaimer of opinions, and opinions when there is a material uncertainty related to going concern.
Accessible on the IAASB website, this new Auditor Reporting Supplemental Guidance complements previously released resources, including videos and webinars, which provide a robust toolkit for navigating the ISA for LCE, adoption, and implementation. Additional resources will be published this quarter, including an adoption guide, supplemental guidance on the authority of the standard, and a first-time implementation guide.
The new guidance does not amend or override the ISA for LCE, the text of which alone is authoritative. Reading the guidance is not a substitute for reading the ISA for LCE.For more information and to access the new guidance, visit: www.iaasb.org/ISAforLCE
The International Standard on Auditing for Audits of Financial Statements of Less Complex Entities
Meant to be read with the ISA for LCE, this supplemental guidance provides assistance for auditors about modifications to the auditor’s report when using the ISA for LCE. It also includes information on using emphasis of matter and other matter paragraphs, reporting on other information, and reporting on a material uncertainty related to going concern.
Complexity, Understandability, Scalability and Proportionality
These drafting principles and guidelines outline a framework to enable writing standards that result in consistent understanding and effective application of the International Standards on Auditing. These principles and guidelines also include writing tips and examples. Writing standards in this way serves the public interest by making the IAASB’s expectations clear to users of its standards.
International Standard on Assurance Engagements (ISAE) 3000 Revised, Assurance Engagements Other than Audits or Reviews of Historical Financial Information
