IAASB offers guidance on auditing less complex entities

The International Auditing and Assurance Standards Board issued new advice Thursday for auditing smaller companies.

The supplemental guidance relates to the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities, also known as ISA for LCE. The new guidance should be consulted in tandem with the IAASB's previous guidance and offers help to auditors about modifications to the auditor's report when using the standard. The guidance also provides information on using emphasis of matter and other matter paragraphs, reporting on other information, and reporting on a material uncertainty related to going concern.

The document includes eight sample auditor's reports, with examples of adverse opinions, disclaimer of opinions, and opinions when there is a material uncertainty related to going concern.

The new guidance complements previously released information, including videos and webinars, and the IAASB, which is affiliated with International Federation of Accountants, plans to release more of it this quarter. The new guidance doesn't amend or override the ISA for LCE, and only the text of the actual standard is considered to be authoritative. "Reading the guidance is not a substitute for reading the ISA for LCE," the IAASB cautioned. For more information on the standard and guidance, visit www.iaasb.org/ISAforLCE.

Photo courtesy of IFAC