U.S. Audit Professionals’ Perspectives on Audits of Less Complex Entities

SYNOPSIS To inform its standard setting approach and agenda, the American Institute of Certified Public Accountants’ Auditing Standards Board (ASB) collaborated with three accounting academics to survey 276 U.S. auditors about the challenges and potential standard setting solutions associated with audits of less complex entities (LCEs). This study reports the results from this survey. Respondents described significant challenges associated with these audits. Most preferred the ASB issue additional guidance on scaling or modifying existing generally accepted auditing standards rather than issue a standalone LCE audit standard to converge with the International Auditing and Assurance Standards Board’s approach. Consistent with practitioner preferences, the ASB declined to issue a standalone LCE audit standard. This paper discusses whether this decision portends a fracturing of the convergence ideal or merely involves an exceptional case driven by jurisdictional differences that negate the need for a standalone standard. It concludes with suggestions for future standard setting research. Data Availability: Survey data are available upon request. JEL Classifications: M4; M40; M41; M42; M48.