The draft, which is open to consultation, has been released in response to demands for a set of high-quality requirements that meet the needs of LCEs.
It intends to provide a “globally consistent” approach to the financial audits of smaller organisations amid a rising number of jurisdictional-specific standards.
Tom Seidenstein, chair of the IAASB, claimed that the draft is “not compromising on the quality of audit.
He added: “Smaller, less complex entities play a vital role in the world’s economy. The IAASB has prioritized addressing the needs of stakeholders representing these entities over the last eighteen months.
“Our new proposed standard’s objective is appropriately focusing the work of auditors through requirements designed to be proportionate to the typical nature and circumstance of less complex entities.”
The body has called for all interested stakeholders to provide feedback on the proposed draft by 31 January 2022.