Proposed international standard on auditing financial statements of less complex entities: IAASB IAAER roundtables—Breakout 1 authority and groups

Amerongen, C.M. van Nieuw; Duits, Hans; Gordon, Elizabeth A.; Street, Donna L.

doi:10.1111/jifm.12162

Cited by 5 publications

(17 citation statements)

References 8 publications

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“…10 While the IAASB excluded group audits and reliance on internal auditors from the scope of the ED LCE, several participants voiced concerns in regard to these issues. Group audits are addressed from the perspective of the first roundtable in Van Nieuw Amerongen, et al (2022a). Internal audit, more specifically the limitations or absence thereof, is especially an issue for external audits in certain regions of the world (e.g., Oceania, Central Eastern Europe) characterized in large part by less complex audit environments.…”

Section: Summary and Recommendations: Contentmentioning

confidence: 99%

“…This commentary is the second of two that provides a quantitative description of the views expressed by the roundtable participants, a qualitative analysis of feedback provided and recommendations for the IAASB to consider as the Board revises ED LCE. The companion commentary addressing the views expressed during the first breakout session is available in a previous issue of the Journal of International Financial Management and Accounting (Van Nieuw Amerongen, et al, 2022a).…”

Section: Introductionmentioning

confidence: 99%

“…55Van Nieuw Amerongen, et al (2022a) provide more detail on these and the related discussion in the breakout groups.…”

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confidence: 99%

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Proposed international standard on auditing financial statements of less complex entities: IAASB IAAER roundtables—Breakout 2 Design, Structure, and Content

Amerongen

Duits

Gordon

et al. 2022

Financ Manag Account

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In this commentary, we summarize stakeholder views articulated during roundtables addressing the 2021 International Auditing and Assurance Standards Board's (IAASB) Exposure Draft: Proposed International Standard on Auditing of Financial Statements of Less Complex Entities (ED LCE). In support of its mission, the International Association for Accounting Education and Research (IAAER)—together with the IAASB—organized by‐invitation roundtables bringing together audit practitioners, academics, and financial statements users. A structured agenda was followed and addressed some of the topics on which the IAASB sought views. This commentary provides a summary of views heard during the second roundtable breakout session focused on Design, Structure, and Content and provides recommendations to the IAASB regarding the way forward. A paper addressing the first breakout session on Authority and Group is available in a previous issue of the Journal of International Financial Management and Accounting.

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Section: Summary and Recommendations: Contentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Proposed international standard on auditing financial statements of less complex entities: IAASB IAAER roundtables—Breakout 2 Design, Structure, and Content

Amerongen

Duits

Gordon

et al. 2022

Financ Manag Account

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“…This study contributes to the scarce research about the ISA for LCEs. The objective of this study was to complement the previous studies examining the ISA for LCEs (van Nieuw Amerongen et al ., 2022, 2023) and to provide new knowledge. The aim was to examine the views that supported and opposed the new, stand-alone draft standard for audits of LCEs’ financial statements.…”

Section: Discussionmentioning

confidence: 99%

“…(2022) conducted a study examining the ISA for LCEs and provided evidence-based comments on the proposed standard. Van Nieuw Amerongen et al. (2023) conscientiously summarized stakeholder views during roundtables on the 2021 IAASB’s ISA for LCEs project, and their results revealed considerable support regarding the need for an international LCE standard.…”

Section: Related Literaturementioning

confidence: 99%

An analysis of comment letters on a new, stand-alone standard for audits of less complex entities’ financial statements

Haapamäki

Mäki

2023

JAL

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PurposeThe objective of this paper is to extend the debate on audit quality in the less complex entity (LCE) context by analyzing comment letters submitted to the International Auditing and Assurance Standards Board (IAASB). The IAASB has drafted a new, stand-alone standard for audits of LCEs’ financial statements.Design/methodology/approachThe Gioia method is utilized to conduct the qualitative analysis. This enables the material to shine and provide a comprehensive picture of the important aspects of the comment letters about the International Standard on Auditing (ISA) for LCEs. A content analysis of the 145 comment letters is conducted to identify the extent of the support for and the arguments against the new, stand-alone draft standard for audits of LCEs’ financial statements. In addition, this study considers how the comment letters describe the respondents’ views on audit quality in relation to the new standard. Finally, the tone of the comment letters and audit quality arguments is investigated.FindingsThe findings provide a useful framework of the most frequently used arguments supporting and opposing the ISA for LCEs. Within the themes identified, a wide variety of issues and concerns are discussed. The results reveal that the arguments in the comment letters are contradictory. For instance, when discussing audit quality, those interest groups that perceived many positive opportunities in the adoption of the ISA for LCEs thought that the audit quality would increase. Conversely, those interest groups that were skeptical about the success of the ISA for LCEs argued that the audit quality could be compromised by the general prejudice that the ISA for LCEs might be perceived as a lower-quality audit with fewer procedures.Originality/valueThis paper is, to the best of the authors’ knowledge, the first to examine the content of comment letters in the context of a new, stand-alone standard for audits of LCEs. The international audience can utilize the results in the context of the widely discussed issue of reducing LCEs’ auditing obligations. This study aims to contribute to the two streams of accounting literature concerning audit quality and political lobbying.

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An examination of comment letters on suggested Part 10: audits of groups' financial statements in the proposed ISA for less complex entities

Haapamäki,

Mäki

2023

JAL

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PurposeThe purpose of this paper is to investigate the comment letters (CLs) in the standard-setting process of audits of less complex entities (LCEs). The objective is to gain insight into the overall picture of the CLs and to report on areas where comment providers agree or disagree with IAASB's Part 10.Design/methodology/approachA content analysis of 60 comment letter (CLs) was conducted to investigate the suggested additional Part 10 on audits of groups' financial statements in the proposed ISA for LCEs. Hence, this study examines three specific topics: (1) the views related to the use of the International Standard on Auditing (ISA) for LCEs for group audits in which component auditors are involved, (2) the proposed group-specific qualitative characteristics to describe the scope of group audits and, finally, (3) insights into the content of the proposed Part 10 and related conforming amendments. The Gioia method is used to provide a holistic approach to concept development of the arguments about the new Part 10.FindingsThe CLs stated that, while the proposed Part 10 has some weak points, it still provides a solid and practical structure within which to undertake an LCE group audit and a promising basis for further development. For instance, when discussing the improvements, the CLs stated that Part 10 should allow for more auditor judgment when determining when the involvement of component auditors renders a group audit complex. In addition, the CLs asserted that professional judgment should be engaged when considering the qualitative characteristics and the complexity of the group.Originality/valueThis study contributes to the very scarce research about the ISA for LCEs and the role of lobbying in shaping the audit standard-setting process.

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Proposed international standard on auditing financial statements of less complex entities: IAASB IAAER roundtables—Breakout 1 authority and groups

Cited by 5 publications

References 8 publications

Proposed international standard on auditing financial statements of less complex entities: IAASB IAAER roundtables—Breakout 2 Design, Structure, and Content

Proposed international standard on auditing financial statements of less complex entities: IAASB IAAER roundtables—Breakout 2 Design, Structure, and Content

An analysis of comment letters on a new, stand-alone standard for audits of less complex entities’ financial statements

An examination of comment letters on suggested Part 10: audits of groups' financial statements in the proposed ISA for less complex entities

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