The Auditing and Assurance Board (AASB) of the Institute of Chartered Accountants of India (ICAI) has issued an exposure draft of the Standard on Auditing for Less Complex Entities hereinafter referred to as “SA for LCE” for public comments.
The SA for LCE is designed to achieve reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, for audits of financial statements of less complex entities. It is important to note that, where an audit engagement is undertaken using this standard, the Standard on Auditing (SA) do not apply to such engagement. Further, this standard will not override local law or regulation that governs audit of financial statements.
The SA for LCE is broadly divided into two parts, “Part A” and “Part 1-10”. The part A sets out the definition of LCE and the applicability of SA for LCE whereas part 1-10 describes the procedures, principles, general requirements for audit evidence and audit documentation. Furthermore, it also discusses about the flow of an audit engagement and the detailed requirements for the audit.
To assure the effective implementation of SA for LCE, ICAI consider stakeholder’s role as pivotal and hence the AASB of ICAI invites its stakeholder to provide their valuable insights on the exposure draft. The last date for submission of comments is September 9, 2024.
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