Journey through a peer review – initial notification

Since my last peer review in 2009, I started blogging and started performing peer reviews.  I’ve also been blogging about peer reviews.

So when I received notification yesterday, May 7, that it is time to start the paperwork for my current peer review, I thought it might be helpful to share my experiences with this journey through the peer review process.

Why? Haven’t all firms gone through the peer review process before?

Actually no.  In California there are a number of firms who still have to go through their first mandatory peer review since 2012 is the third year of the phase in of that requirement.  Other firms will perform their first attestation work and have to step into the peer review process.  New firms are still forming.  In larger firms, partners who have not been involved in the peer review process can get that responsibility assigned to them.

So, there are a lot of CPAs who could be helped by reading about this journey.

Yesterday I received a letter from the CalCPA Peer Review Program telling me it’s time to get started.

Peer review year-end

For my firm, May 31 marks the year-end date for peer review purposes.  That is cut off for determining what engagements are included in the peer review. For readers of this blog, that means your compilation, review, and audit engagements. This does not include tax, write-up, or consulting work.  It would include work under the attestation standards, but that probably is not a factor for most readers here.

What dates fit within that date?

That’s not a silly question, but actually a point of confusion. It is the balance sheet date of my clients that I am reporting upon. It is not when I performed the work or the date of my report.


Six months after the end of my peer review year is when I have to get all peer review documents to CalCPA.  That means my target is November 30.

What has to be done by then? My peer reviewer has to send the final report and selected workpapers to the peer review program by that date.  If I were to receive a pass with deficiency or fail report (which I consider to be unlikely), I would have to turn in my written response by then.

Beginning the process

There is a special form, called the Peer Review Scheduling Form, which is used to start the process. The letter from CalCPA gives a hot link to the form. It is fairly long but not as intimidating as it would seem since there’s a lot of explanation and whitespace on the form.

The Peer Review Scheduling Form needs to be completed and returned to CalCPA within 30 days. So that is due back to them by June 7 for my firm.

The first part of the form provides background information on the firm and contact information.

I will hire a reviewer on my own, which means I will have a “firm on firm” review. When I make those arrangements, I will fill out Exhibit 1 to identify the firm.

Time needed to complete the form

It took me 18 minutes to complete the form and send it to CalCPA. I’ve worked with the form a number of times in the last year as a part of performing peer reviews. You can adjust my time based on my experience so you can have an expectation of how quickly you can complete the form.

Finding a firm

If you need to find a reviewer, CalCPA publishes a directory of peer reviews who choose to be listed in the directory.  The letter I received yesterday has a link to the peer review page of the state society. The link Directory of Reviewers on the right side of page under Valuable Resources leads to the directory.

Caution! Self promotion alert follows!  My firm is listed in the directory since I am available to perform peer reviews.

Choose your peer reviewer intentionally.  Many CPA firms want their reviewer to be from a firm of roughly comparable size. Sole practitioners may want to get another sole practitioner or someone from a firm with just a few partners. A firm with multiple offices may prefer a reviewer with experience in a multi-office environment.

Since there has to be a match between the industry concentration of your firm and your reviewer’s experience, your reviewer may be a player in your market niche. You may want to find someone from another area of the state. Or to hold down travel costs you may want someone who works near your office.

Find a reviewer you are comfortable with. Personalities matter. You will get more out of the process and it will go better if you click with your reviewer.

When you find a peer reviewer and make arrangements for him or her to perform the review, you need to fill out Exhibit 1 of the Peer Review Scheduling Form.

You send Exhibit 1 to CalCPA for their review.  They will make sure that the peer reviewer is approved as a reviewer and make sure that there is a match between the reviewer’s experience and any industry concentrations in your practice.

You will know that CalCPA has approved your reviewer when they sent you and your reviewer a letter saying so.  Do not start the actual review until CalCPA has sent you that letter.

More discussion will follow as I journey through the peer review this year.

Next post – the initial scheduling form is approved.

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