Exposure Draft of Standard for Audit of Smaller and Less Complex Entities

Last updated: 22 February 2021

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The Institute of Chartered Accountants of India (ICAI) has published an Exposure Draft for a new Standard on Auditing of Smaller and Less Complex Entities (SA-SLCE). This draft outlines specific criteria for an entity to be classified as an SLCE, including its structure, financial turnover, asset value, and business sector.

The Institute of Chartered Accountants of India has released the Exposure Draft of Standard for Audit of Smaller and Less Complex Entities. Read the entire draft released below:

ICAI Releases Draft Standard for Auditing Smaller Entities

Chapter 1

Applicability of SA-SLCE

Definition

Smaller and Less Complex Entity (SLCE) means an unlisted entity which satisfies all the following conditions -

1. Entity which is not a company.

2. Entity whose turnover/ gross receipts is not exceeding rupees 50 crore in the last audited annual financial statements.

3. Entity whose turnover/ gross receipts is not exceeding rupees 50 crore in the accounting year under audit.

4. Entity whose investment in plant and machinery or equipment is not exceeding rupees 10 crore as on the first day of the accounting year under audit.

5. Entity which is not into the business of Banking/Insurance/NBFC at any time during the year.

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FAQ :

The Institute of Chartered Accountants of India (ICAI) has released an Exposure Draft of the Standard for Audit of Smaller and Less Complex Entities (SA-SLCE).

An SLCE is an unlisted entity that is not a company, with turnover/gross receipts not exceeding Rs 50 crore in the last audited financial statements and the current year under audit. It also requires investment in plant and machinery/equipment not exceeding Rs 10 crore at the start of the audit year, and must not be in the Banking, Insurance, or NBFC business.

The turnover or gross receipts must not exceed Rs 50 crore in the last audited annual financial statements and also not exceed Rs 50 crore in the accounting year currently under audit.

The entity's investment in plant and machinery or equipment should not exceed Rs 10 crore as of the first day of the accounting year under audit.

Entities engaged in the business of Banking, Insurance, or Non-Banking Financial Company (NBFC) at any time during the year are excluded from being classified as an SLCE.

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Exposure Draft of Standard for Audit of Smaller and Less Complex Entities