Using the ISA for LCE in Nigeria, not in Kenya
Whether a Nigerian or Kenyan audit can use the ISA for Less Complex Entities, and the documented assessment Achekam asks for before it allows it.
By Achekam · · 4 min read · For Accountants & audit firms in Nigeria, Kenya
For a firm with a book of owner-managed audits, the International Standard on Auditing for Less Complex Entities is an attractive idea: one self-contained standard, written for simpler engagements, instead of the full suite of ISAs. Whether you can use it depends on where the audit is, and on whether the entity really is less complex.
Achekam answers the first question differently for Nigeria and Kenya. For a Nigerian audit it allows the ISA for LCE, but only after a documented assessment and a partner's decision. For a Kenyan audit it refuses. This article explains why, and what the firm should have on file either way.
The FRC's adoption notice
Nigeria applies the IAASB's International Standards on Auditing as issued, with ISQM 1 and ISQM 2 from 15 December 2022. On 28 July 2025 the FRC published a notice adopting the ISA for Less Complex Entities. The notice is on the FRC's website as a public notice adopting the ISA for LCE, with the standard available to download, and is worth reading in full before the firm decides how it will use the standard.
Adoption makes the standard available; it does not make it suitable for any particular client. A firm that intends to use it should say so in its own quality management policies under ISQM 1: which kinds of engagement may be considered, who decides, and how that decision is reviewed. That policy is what turns one partner's judgement into a consistent firm practice.
No Nigerian effective date: the IAASB's date is used
The FRC's notice did not set a Nigerian effective date of its own. Achekam therefore uses the IAASB's effective date for the standard when it lets a Nigerian audit use it. If the FRC later sets a date of its own, that is the date a firm should follow, and the firm should check for any such update before relying on the IAASB's.
A documented assessment and a partner's decision
A Nigerian firm can use the ISA for LCE in Achekam only after a documented assessment and a partner's decision. The assessment is not a box to tick. The standard itself sets out the entities it may not be used for and the characteristics that make an entity less complex, and the assessment should work through both against the actual client.
A useful assessment covers:
- the entity's ownership, structure and the people who run it;
- the nature of its transactions and any areas of significant judgement or estimation;
- any reason, such as group structure or public interest, that would put it outside the standard's scope;
- what would make the firm switch back to the full ISAs during the engagement.
The partner's decision then rests on that record. It also has to hold up later. If, during fieldwork, the team finds complex financial instruments, a significant related-party arrangement or a judgemental estimate the assessment did not anticipate, the decision should be revisited and the change recorded.
The decision sits in the Audit Control Tower that Achekam shows on every Nigerian or Kenyan engagement, alongside entity classification, whether company law requires an audit, an acceptance checklist, regulatory confirmations and sector checklists.
Kenya: refused as not adopted
Kenya applies the IAASB's International Standards on Auditing as issued, with ISQM 1 and ISQM 2. For a Kenyan firm, Achekam refuses the ISA for LCE on Kenyan audits because no ICPAK adoption of it was found. A Kenyan audit in Achekam therefore runs on the full ISAs, however small the client.
That does not mean every Kenyan owner-managed audit has to be heavy. The full ISAs are scalable, and a firm can still plan proportionately: proportionate risk assessment, a clear materiality decision approved by the engagement partner, and a working-paper set sized to the client. What it cannot do in Achekam is label the audit as performed under the ISA for LCE.
Recording the choice on the engagement
The knowledge-base entries that record FRC Nigeria's and ICPAK's adoption of the ISAs and ISQM 1 and 2 are used behind the scenes in this decision. Firms cannot browse those entries; that screen is for Achekam staff only. So the firm's own file has to show the basis for the choice.
Achekam also ships working-paper template packs written in its own words, including an ISA for LCE pack, for a firm to adopt and approve. The catalogue is marked as unapproved platform content until the firm adopts it, so a partner should review the pack before the first engagement relies on it.
| Nigeria | Kenya | |
|---|---|---|
| Adoption | FRC notice of 28 July 2025 | No ICPAK adoption found |
| Effective date used by Achekam | The IAASB's, as the FRC set none | Not applicable |
| What Achekam needs first | Documented assessment and partner decision | Refused |
| Working-paper pack | Adopt and approve the ISA for LCE pack | Use full ISA packs |
A checklist before choosing the standard
- Confirm the engagement's country: Nigerian or Kenyan.
- For Nigeria, read the FRC's notice and check for any later effective-date guidance.
- Work through the standard's scope limits and complexity characteristics for the actual client.
- Record the assessment and get the partner's decision.
- Adopt and approve the ISA for LCE working-paper pack before using it.
- Set a trigger in the plan for returning to the full ISAs if complexity appears.
- For Kenya, plan a proportionate audit under the full ISAs.
Where the decision leads
Whichever standard applies, the engagement still needs a materiality decision the partner approves, covered in materiality approval. Firms that also send statements to another firm for independent review will find that process in independent review by another firm.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
