Peer Review Transparency

There is a growing demand for increased transparency in all facets of business, as well as calls for transformation of governance from compliance to adding value.
Regulators are looking for greater access to, and involvement with, peer review. Currently 42 state boards of accountancy (BOAs) require mandatory peer review for renewal of a license or licensure and of those states over 21 have some type of submission requirement.
The National Association of State Boards of Accountancy (NASBA) and many state CPA licensing bodies have become strong advocates for requiring the disclosure of peer review results and additional regulatory involvement in the peer review process.

There is increasing concern that what is now a national uniform peer review program - managed by the AICPA and administered by 41 entities across the country - will become fractured, and lead to numerous and disparate individual state programs if we are not responsive to the state licensing bodies.

The profession must take the lead on the issue before the lack of uniformity among state licensing bodies becomes even more burdensome. Such leadership is critical both for the good of our members and to uphold the professions public protection mandate.

The AICPA carefully evaluated various options to identify the best way to address the user demands for greater peer review transparency, while considering member and CPA state society concerns. As part of this process, the AICPA met with state society executives and conducted member focus groups.

After careful study, research and evaluation, the AICPA and stakeholders determined the best way to increase peer review transparency at this time is by using the existing peer review process to facilitate the voluntary disclosure of peer review results to state boards of accountancy (BOAs). This voluntary process is called Peer Review Facilitated State Board Access.

Peer Review Facilitated State Board Access

This new program uses the existing peer review process to facilitate the voluntary disclosure of peer review results to state boards of accountancy (BOAs).

The goal of Peer Review Facilitated State Board Access is to create a nationally uniform system through which CPA firms can satisfy state board or licensing body peer review information submission requirements, increase transparency, and retain control over their peer review results.

The AICPA is engaged in an ongoing collaborative effort with the CPA state societies to allow this process to become the primary means by which all BOAs obtain peer review results. Over time, this new process will help to make the submission of firm peer review information easier.

In the short term, this new process may not have replaced the peer review information submission requirements that BOAs may have in place, so it is important that CPA firms continue to follow their BOAs’ submission requirements until the unified goal is reached.

The AICPA is piloting this new process with six states in October 2007. The six states participating in the pilot program are; North Carolina, Ohio, Oklahoma, South Dakota, Tennessee and Texas. Full implementation is expected in 2009 in conjunction with the acceptance of new peer review reports issued under the revised AICPA Standards for Performing and Reporting on Peer Reviews.

For more information on the Peer Review Facilitated State Board Access process and pilot program please click here.