The Role of Audit in Small and Medium-Sized Enterprises (SMEs) Under International Standards

SMEs are key drivers of the economy but often face challenges in financing and compliance. External audits serve as an effective tool to support their growth by:

• Enhancing Trust and Credibility: Audited financial statements boost confidence among investors and banks, easing access to funding.
• Improving Financial Information Quality: Audits improve data accuracy, helping management make better decisions.
• Ensuring Regulatory Compliance: Audits ensure adherence to accounting standards and laws, minimizing legal risks.

• Flexible Application: ISAs allow proportionate implementation suitable for SMEs without compromising audit quality.
• Specialized Guidance: Organizations like IFAC provide practical tools and guidance for effective audit implementation.

• Tailored for SMEs: Effective from December 2025, this standard simplifies audit processes for smaller entities.
• Benefits:
  • High flexibility
  • Lower cost
  • Consistent audit quality

• Limited Resources: SMEs often lack sophisticated internal controls, requiring auditors to focus on key risk areas.
• Technology as a Lever: Using data analytics tools enhances the efficiency and depth of audit findings.
• Adding Value Beyond Compliance: Auditors are expected to deliver practical recommendations—not just a formal opinion.

Audit activities in SMEs are essential for building a transparent and resilient business environment. Applying international standards proportionately, along with tools like ISA for LCE, empowers SMEs to enhance audit quality, attract investment, and achieve long-term growth.

“Effective auditing for SMEs is not just compliance—it’s a strategic investment in sustainability and future success.”