Experts at a virtual meeting on Sunday opined that smaller, less complex entities (LCEs) make a critical contribution to the world economy and that accounts for the great majority of audits globally.
At the same time increasingly complex structures and transactions need to be addressed through the development and revision of the International Standards on Auditing (ISAs) for those entities, they said. The International Audit and Assurance Standard Board (IAASB) recognizes that reflecting this complexity in the ISAs could pose challenges for audits of less complex entities. The webinar on ‘Audit of Less Complex Entities’ organized by the Institute of Chartered Accountants of Bangladesh (ICAB).
Professor Dr. Md. Hamid Ullah Bhuiyan, Chairman, Financial Reporting Council (FRC), Bangladesh attended the webinar as the chief guest.
ICAB President Md. Shahadat Hossain FCA delivered the address of welcome. M Anwarul Karim FCA, Executive Director - Standard Setting, FRC and Md. Yasin Miah FCA, Council Member ICAB & Principal & CEO of M M Yasin & Co., Chartered Accountants spoke as panel speakers. Sabbir Ahmed FCA, Council Member of ICAB & Partner, Hoda Vasi Chowdhry & Co., Chartered Accountant presented the keynote paper while Kamrul Abedin FCA, Council Member & Past President of ICAB moderated the webinar as session chairman.
The experts said, the International Standards on Auditing (ISAs) are designed to be applied to a wide variety of entities with differing circumstances and sizes, ranging from those whose nature and circumstances are simpler and more straightforward o those entities whose nature and circumstances are more complex. They said, in general, Less Complex Entities are the entities which have smaller capital, limited day to day transaction and the operation which is not more complex and have small turn over. It is estimated that more than 90% of entities across the world are small and medium-sized entities (SME), with some regions estimating that the percentage could be higher, such as in the European Union where it is estimated that over 99% of entities are SMEs. In case of emerging economy like Bangladesh, the scenery is same, they added. ICAB President Md. Shahadat Hossain said, some stakeholders have therefore already questioned whether the ISAs remain relevant and can be applied in a cost-effective manner to all audits.
He said, the IAASB acknowledged that the volume and complexity of the standards may result in challenges for audits of entities that are less complex.
In order to achieve effective implementation globally its standards need to be proportionate and scalable for audits of all sizes and complexity, he opined and said, the purpose of an audit is to enhance the degree of confidence of intended users in the financial statements of an entity.
