Practitioners have identified scalability challenges when applying the Canadian Auditing Standards (CASs) to audits of entities where their nature and circumstances are less complex – in particular, Canada’s many small and micro-entities.
Similar issues in audits of less complex entities (LCEs) are experienced by practitioners around the world. Consequently, the International Auditing and Assurance Standards Board (IAASB) has undertaken an initiative to:
- better understand the challenges faced by practitioners in applying the International Standards on Auditing (ISAs) to audits of LCEs; and
- explore possible actions to take in responding to the identified challenges.
As the AASB adopts ISAs as CASs, the approach the IAASB takes in addressing this issue is relevant to Canada. AASB representatives and staff are involved in several international discussions and activities exploring how to make auditing standards more scalable for LCEs. The AASB is monitoring the IAASB’s activities in this area with great interest and is providing feedback on IAASB activities. Canadian practitioners are encouraged to follow the progress of this initiative and provide feedback as necessary.