The AICPA Peer Review Program is dedicated to enhancing the quality of accounting, auditing and attestation services. The Program is a systemic evaluation whose value in serving the public interest and firms lies in its educational and remedial nature. The Program is not intended to assure that firms will perform all engagements, in all industries, in accordance with professional standards with the failure to do so leading to punitive measures. The Peer Review Program seeks to elevate firms so that their practices match the work of their peers. All involved stakeholders should fully understand, accept, engage, and promote the Peer Review Program and its value. Why should your firm consider peer reviews? Read this AICPA Insights blog and watch this video featuring Michael Brand, CPA.
Peer Review Process and Requirements for PCPS Member Firms:
Since PCPS and its member firms strive for commitment to quality, a membership requirement of PCPS member firms is that they must:
- Be enrolled in an approved AICPA practice monitoring program.
- Have their peer reviews performed under the AICPA Standards for Performing and Reporting on Peer Reviews.
- Upon request, provide PCPS their peer review results which are posted to the AICPA Peer Review Public File and include the firm's most recent peer review report, acceptance letter, letter of response (if applicable) and letter signed by the reviewed firm accepting the peer review documents with the understanding that the firm agrees to take certain required actions (and, if the review was performed prior to January 1, 2009, the letter of comments, if any).
Peer review results are uploaded (and are automatically available in the Public File) by the entity administering the firm’s peer review within 30 days of the acceptance of that review.
Note 1: Not all AICPA member firms peer review results are posted to the AICPA Peer Review Public File. Posting is only required for member firms of certain sections within the AICPA (e.g., PCPS, EBPAQC and GAQC).
Note 2: If your firm does not have an accounting and auditing practice and therefore does not perform services that include issuing reports purporting to be in accordance with AICPA professional standards, this requirement does not apply to your firm.
Firms that are active in the practice of public accounting fall under this peer review requirement as follows (source: AICPA Standards for Performing and Reporting on Peer Reviews
| Type and Requirements
|System Review - Firms that perform engagements under the SASs (i.e. audits), Government Auditing Standards, examinations of prospective financial statements under the SSAEs, examinations of a service organization’s controls likely to be relevant to user entities’ internal control over financial reporting under the SSAEs, or audits of non-SEC issuers performed pursuant to the standards of the PCAOB have peer reviews called System Reviews
- A System Review includes determining whether the firm’s system of quality control for its accounting and auditing practice is designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards, including SQCS No. 8, in all material respects.
- The majority of the procedures in a System Review should be performed at the reviewed firm’s office.
|Engagement Review - Firms that only perform services under SSARS (i.e. reviews and/or compilations) or services under the SSAEs not included in System Reviews have peer reviews called Engagement Reviews.
- The objective of an Engagement Review is to evaluate whether engagements submitted for review are performed and reported on in conformity with applicable professional standards in all material respects.
- An Engagement Review consists of reading the financial statements or information submitted by the reviewed firm and the accountant’s report thereon, together with certain background information and representations and, the applicable documentation required by professional standards.
- Engagement Reviews are normally performed at a location other than the reviewed firm’s office.
Firms that are enrolled in an AICPA approved practice-monitoring program are obligated to adhere to quality control standards established by the AICPA.
Quality Control Standards and Quality Control Document Guidance:
Statement on Quality Control Standards (SQCS) No. 8, A Firm's System of Quality Control (Redrafted) (AICPA, Professional Standards, vol. 2, QC sec. 10), requires every CPA firm, regardless of its size, to have a system of quality control for its accounting and auditing practice. To better understand and apply Statements on Quality Control Standard (SQCS) No. 8, purchase the AICPA Audit and Accounting Practice Aid Establishing and Maintaining a System of Quality Control for a CPA Firm’s Accounting and Auditing Practice.