Audits of Less Complex Entities (LCEs)

lce

 

This consultation examined the possibility of adopting the ISA for LCE auditing standard, tailored to fit New Zealand conditions.

Read our feedback statement for a summary of what we heard:

ISA for LCE Feedback Statement

The International Auditing and Assurance Standards Board (IAASB) has issued a new auditing standard, the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE). The ISA for LCE is a stand-alone auditing standard available for auditors to use when auditing less complex entities. 

The standard contains all requirements necessary to obtain reasonable assurance about whether the financial statements of a less complex entity are free from material misstatements. 

While the auditing standards (ISA (NZ)) are scalable, we have heard concerns that these standards are getting increasingly complex and written in the context of highly regulated, large, listed entities. In New Zealand, the type of entities that are required to have an audit varies considerably. There are many less complex entities that have audits, including charities and sports clubs, schools and early childhood centres. 

The ISA for LCE is aimed at addressing concerns that the auditing standards are getting too long and complex for the audits of less complex entities.  During the development of the ISA for LCE we consulted with stakeholders and heard mixed views regarding its use in New Zealand as well as support from many for adoption.

Now that the ISA for LCE has been issued globally, we have developed a proposed New Zealand equivalent and want stakeholder feedback on:

  • Who would use the ISA (NZ) for LCE if it is adopted in New Zealand
  • The applicability of the standard in New Zealand.
  • If and how to incorporate the audit of service performance information within the New Zealand Standard.

Further information

 

 

Events

Our events have concluded.

You can also watch a recording of our Walk-through Webcast or our Panel discussion below.

Walk-through Webcast

 

Panel discussion

On 17 February we held a panel discussion event to delve into key aspects of our consultation. 

 

Consultation closed on 27 February 2025.


Written submissions received

Written submissions were received via our website, email, or e-forms.

Angela Giddy Craig Fisher
Ashton Wheelans Limited Cranford Hospice
Assoc Prof Dr Radiah Othman Deloitte
Auckland Regional Amenities Funding Board Michael A Burt
Audit Assistant Ministry of Education
Audit Plus Accounting Services Ltd Moore Markhams Wellington Audit
Baker Tilly Staples Rodway Office of the Auditor General
BDO NZ PwC
CAANZ CPA Australia Smith and Jack Ltd
CATAS Limited Sport NZ
Charities Services Te Omanga Hospice Trust
Chrissie Murray The Invisible Office Company Ltd

Read our feedback statement for a summary of what we heard:

ISA for LCE Feedback Statement