Adoption around the world

ISA for LCE: A Better Fit for Audits of Less Complex Entities

One international standard, adopted jurisdiction by jurisdiction. Pick a market to see who sets the standard there and where it stands today.

Adopted

New Zealand

Standard-setter · External Reporting Board (XRB)

New Zealand was one of the first movers. The External Reporting Board (XRB) has issued the ISA (NZ) for LCE, so firms here can audit eligible less complex entities under the standard today. As a New Zealand company, we follow the ISA (NZ) for LCE closely.

Issued as the ISA (NZ) for LCE by the XRB
Available for eligible NZ engagements today
Localised to New Zealand requirements

Adopted or permitted Planned or under consideration

Adoption and timing are decided by each jurisdiction’s standard-setter, and this list keeps moving. European status follows Accountancy Europe’s September 2026 factsheet. Talk to us about your requirements.

ISA for LCE · the standard

What you need to know about the LCE standard

The biggest change to auditing in over a decade, in plain terms. Scroll through each one, or jump straight to a topic.

01 — Standalone, everything in one place

A standard of its own

The ISA for LCE is a complete, standalone auditing standard. The IAASB issued it in December 2023 after years of consultation. Rather than working across the full suite of International Standards on Auditing, the auditor has every requirement for a less complex engagement in one place, tailored for the complexity of the job.

For an auditor that means far less to wade through. The requirements, the application material and the auditor's report are all set out for a less complex engagement, so your team is not searching the full ISAs and hoping nothing was missed. It is the same destination, reached by a shorter and clearer road.

Issued by the IAASB, December 2023
Self-contained — no cross-referencing the full ISAs
Tailored for less complex entities

02 — Eligibility under Part A

Which entities qualify

The standard is for less complex entities. Eligibility comes from the qualitative characteristics in Part A, plus any quantitative thresholds or prohibitions a jurisdiction sets. Listed entities and certain higher-risk or public-interest entities are out of scope, and the judgement (with its evidence) sits in the file.

In practice, most owner-managed companies, charities, trusts and small groups fit comfortably. The point is to make that call deliberately and record why. Audit Assistant builds the eligibility assessment into the file, so the decision and the reasons behind it are captured the moment you start.

Qualitative characteristics set out in Part A
Local thresholds and prohibitions may apply
Not available for listed or specified higher-risk entities

03 — Scaled to the entity, not lighter

A proportionate audit

Proportionate does not mean less assurance. It means the work matches the entity. The standard keeps the focus where risk actually sits for less complex entities and removes the overhead that audits of these entities never needed.

The result is fewer steps that never applied to less complex entities and more time on what carries real risk. The work still has to be done and evidenced, but the file reflects the size and shape of the entity in front of you rather than a one-size-fits-all template stretched to fit.

Focus on areas where risks actually sit
Less overhead, no loss of rigour
Built around how audits of LCEs really run

04 — A robust, defensible opinion

The same reasonable assurance

An LCE audit delivers the same reasonable assurance as a full-ISA audit. The opinion carries the same weight with banks, regulators and boards. What changes is the route to get there, not the destination.

That matters for everyone who relies on the opinion. A lender, a regulator or a board sees an audit, not a lesser version of one. The standard was written precisely so that proportionate never reads as second-rate, and the assurance you sign keeps its full value.

Reasonable assurance, the same bar as a full-ISA audit
An opinion you can stand behind
Recognised by the users who rely on it

05 — One base, adopted worldwide

A global standard

Because it is one international standard, the ISA for LCE gives firms a common base across borders. Each jurisdiction adopts or permits it through its own standard-setter. The list of adopters keeps growing.

For firms with clients in more than one country, that shared base is a real advantage. The methodology travels, the language is common, and as more jurisdictions adopt, the same way of working extends with them. Audit Assistant is built on the international standard, so you are ready wherever your clients are.

One international base, adopted jurisdiction by jurisdiction
Effective for periods beginning on/after 15 Dec 2025
A growing list of adopting markets

We build audit software. A purpose-built LCE solution

LCE templates and checklists map to the standard
Have confidence knowing you meet the requirements of the standard
Unlock efficiencies the standard was designed to deliver
Trusted with auditors' files since 2009 — secure and supported

See ISA for LCE pricing

LCE audit questions, answered

An LCE audit is an audit done under the ISA for LCE, the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities. It’s a standalone global standard, and it gives the same reasonable assurance as a full-ISA audit using requirements scaled to the size and simplicity of the entity.

The IAASB issued the ISA for LCE in December 2023. It’s a self-contained auditing standard for smaller, less complex businesses, with every requirement for the engagement in one place instead of spread across the full suite of International Standards on Auditing.

The ISA (NZ) for LCE is New Zealand’s version of the standard, issued by the External Reporting Board (XRB). Auditors can use it once they’ve determined the entity (or group) is a less complex entity under Part A.

It comes down to the qualitative characteristics in Part A, plus any quantitative thresholds or prohibitions your jurisdiction sets. Listed entities and certain higher-risk entities are out of scope, and the judgement, with its supporting evidence, belongs in the audit file.

Yes. The templates, checklists and workflow are built and ready, so firms picking up the standard can start a compliant engagement right away instead of building a methodology from scratch.

Yes. It’s a single global standard from the IAASB, meant to be used anywhere. Each jurisdiction adopts, permits or adapts it through its own standard-setter, which gives firms working across borders a common base to build on.

Information about the adoption status of International Standards on Auditing (ISAs), including the ISA for LCE, is available on IFAC’s Adoption Status page: ifac.org/what-we-do/global-impact-map/adoption-status. For Europe, Accountancy Europe’s ISA for LCE factsheet (September 2026) tracks adoption and implementation across the 27 EU Member States, Iceland, Norway, Switzerland, Turkey and the United Kingdom.

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