Proposed amendments for audits of less complex entities
What is changing and why?
We are consulting on two matters that affect ISA (NZ) for Less Complex Entities (LCE):
- Targeted New Zealand specific amendments to enable auditors to use control reports from service organisations as audit evidence in certain circumstances; and
- International proposals developed to maintain the ISA for LCE following revisions to auditing standards on going concern, fraud, publicly traded entities and using the work of an expert.
We propose New Zealand amendments for when an entity uses a service organisation
Based on recent engagement, auditors considering the ISA (NZ) for LCE explained that in some circumstances they rely on controls reports as evidence when auditing LCEs.
We propose narrow scope amendments responsive to concerns raised.
We plan to adopt the international proposals once it is finalised
The IAASB is committed to keeping the ISA for LCE current while preserving its proportionate nature. The IAASB is proposing targeted updates to the ISA for LCE following recent revisions to the full ISAs for fraud and going concern, and updates that address the interoperability with the code of ethics.
The IAASB exposure draft gives you the opportunity to inform the XRB’s submission to the IAASB on the proposed revisions to the ISA for LCE, and shape the New Zealand standard.
Let us know your thoughts on ISA (NZ) for LCE
We are interested to understand adoption experiences of the ISA (NZ) for LCE in New Zealand. We are consulting on these matters together because they affect auditors considering whether to use the ISA (NZ) for LCE. However, they have different sources, different purposes, and different proposed application dates.
Accessing the exposure drafts
How to provide feedback
Consultation closes on 25 September 2026
You can provide feedback by:
- attending our virtual deep dive event,
- completing our feedback form, or
- emailing your submission to assurance@xrb.govt.nz
All submissions will be published on the XRB website at the close of the consultation.