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

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

doi:10.1111/jifm.12165

Cited by 3 publications

(8 citation statements)

References 15 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…To summarize, the majority of submissions (81 comment letters or 55.8%) saw potential in the new standard and one-third (39 comment letters or 26.9%) were not entirely convinced that the planned reform would be successful without modifications. These results are in line with van Nieuw Amerongen et al. ’s (2022) study, which found that 58% of the roundtable participants agreed that the ED ISA for LCEs is adequately structured regarding requirements and 11% of the roundtable participants stated that the ED needs improvements.…”

Section: Resultssupporting

confidence: 88%

“…The comment letters also discussed whether the ISA for LCEs should be a stand-alone standard; therefore, we examined the views related to the stand-alone nature in detail. This examination also enabled us to compare the results with those of van Nieuw Amerongen et al. ’s (2022) study.…”

Section: Resultsmentioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

“…Our study complements these two studies in the following ways. Firstly, van Nieuw Amerongen et al. (2022, 2023) analyzed thoroughly the roundtable discussions among 54 participants, while we analyze a relatively large number of comment letters (145 CLs) from different interest groups.…”

Section: Related Literaturementioning

confidence: 99%

“…an audit of an LCE) may lead to inconsistencies in quality and cause confusion for users. It is therefore in the public interest to establish a high-quality standard that has global relevance (van Nieuw Amerongen et al, 2022). One of the efforts to improve the audit quality in the auditing of an LCE is the international adoption of the latest risk-based audit standards referring to the ISA for LCEs.…”

Section: 3mentioning

confidence: 99%

See 4 more Smart Citations

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

Haapamäki

Mäki

2023

JAL

View full text Add to dashboard Cite

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.

show abstract

Section: Resultssupporting

confidence: 88%

Section: Resultsmentioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

Section: 3mentioning

confidence: 99%

See 3 more Smart Citations

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

Haapamäki

Mäki

2023

JAL

View full text Add to dashboard Cite

show abstract

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

View full text Add to dashboard Cite

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.

show abstract

External auditing arrangements of smaller authorities in England

Lakoma,

Murphy,

Toothill

2024

Int J Auditing

View full text Add to dashboard Cite

Less complex entities (LCEs) make a critical contribution to the public, private and voluntary sectors in England and internationally and account for the great majority of all local public audits. Recently, the role and objectives of financial reporting and external auditing in England have been subject to unprecedented criticism through a number of independent national reports. This paper discusses the auditing arrangements for LCEs in the public sector in England by examining the evidence generated by the local public audit review by Sir Tony Redmond. It discusses implications for the local public audit regime and considers whether the existing and proposed accountability and transparency arrangements are compatible with the new International Standard on Auditing (ISA) for LCEs. It contributes to the limited research on the new ISA for LCEs by investigating the differences and similarities between the new ISA for LCEs and the emerging auditing standards for English LCEs.

show abstract

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

Cited by 3 publications

References 15 publications

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

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

External auditing arrangements of smaller authorities in England

Contact Info

Product

Resources

About