The WPK believes the draft is a major step towards supporting auditors when conducting more efficient and effective LCE audits because the proposal contains all of the fundamental concepts and general principles, as well as all of the key requirements from the full ISAs. In its statement, it addresses the following points in particular:

Concept of Qualitative Characteristics

The concept of qualitative characteristics is clear. Without further support and instruction, however, we see the risk of inconsistent application in various legal systems, auditing companies or even auditing teams because the assessment as to whether a characteristic has been met can be interpreted in different ways.

Concept of the Stand-Alone LCE Standard

In principle, we are in favour of the concept of a “self-contained” stand-alone LCE standard without recourse of the full ISAs. However, there is no regulation of whether using the complete ISA requirements or resource materials to carry out additional, voluntary audit actions is permissible.

Risk of Perception as “Audit Light”

There is a risk that the LCE audit will be perceived as an “audit light”, as a result of which additional pressure may be exerted on audit fees. We therefore see an urgent need to encourage acceptance of the ISA for LCE by means of public relations and educational work by the IAASB.