Audits of Less Complex Entities - Discussion Paper

On September 10, 2021, the Auditing and Assurance Standards Board (AASB) issued a Discussion Paper to obtain stakeholder input on three options that can be explored in Canada to address the challenge of applying the Canadian Auditing Standards (CASs) to audits of less complex entities (LCE).

These options include:

• Option 1 - Developing a separate stand-alone standard for LCE audits including assessing whether the International Auditing and Assurance Standards Board’s (IAASB) LCE Exposure Draft is appropriate to adopt in Canada or can serve as a basis for developing an equivalent Canadian standard.
• Option 2 - Making limited targeted revisions to the CASs to support the need for scalability and proportionality.
• Option 3 - Developing targeted non-authoritative guidance to assist practitioners in applying the CASs to LCE audits.

Comments to the AASB’s LCE Discussion Paper and the IAASB’s LCE Exposure Draft are requested by December 10, 2021 and January 31, 2022, respectively. The AASB is also holding virtual roundtables to seek further input on audits of LCEs. You can register for the roundtables here.