Peer Review

Peer review reports are public for some firms – Here’s how to see the report on my firm

You can find the peer review report at the AICPA web site for those CPA firms who are members of one of three special sections:

  • Employee Benefit Plan Audit Quality Center (EBPAQC)
  • Governmental Audit Quality Center (GAQC)
  • Private Companies Practice Section (PCPS)

Since I’m a member of PCPS, you can find my report there.

Go to the Peer review public file search page to look up a firm.

Enter my firm name there and you can get a screen that lists my firm and shows a link to two documents:

You can see for yourself that I received a “pass” rating.

If a firm is a member of EBPAQC, GAQC, or PCPS, you can find their peer review report at the above page.

Frequently asked questions on the Peer Review program in California

The California Board of Accountancy has a great FAQ posted here. It covers a lot of general questions on the peer review program.

Check it out.

Good discussion of the transition to reporting your peer review status every two years when you renew your license. Remember the phase-in was over three years.

That two-year reporting requirement doesn’t mean you have to get a peer review every two years. Just that you have to report your status when you renew every two years. Will likely get you into the situation where you tell the board about one specific peer review report on two consecutive renewals.

Most common audit deficiencies that generate ethics violation investigations

The AICPA’s Professional Ethics Division has published their report on most common ethics violations in the last year.

About 40% of the cases investigated by the Division deal with audits of government agencies and NPOs.  That’s a depressing portion of ethical issues arising from those two areas. I doubt that is reflective of portion of total audits performed.

That statistic should end the perception that audits of government agencies and NPO don’t have risk. If there is a disproportionate possibility you will wind up in front of an AICPA Ethics hearing, you are not dealing with a low risk audit.

Their report provides a good survey of the major issues.

Ulvog CPA firm receives “Pass” rating in Peer Review

(Cross-post from my other blog, Nonprofit Update.)

I am pleased to report that my firm received a pass rating on the peer review which was performed in November 2012.

The peer review program is a process the CPA profession has developed to look at the quality of audit and other attestation work performed by CPAs. Firms are inspected by other firms to evaluate compliance with various professional standards.

Overview of Peer Review from California Board of Accountancy

The following article is reprinted with permission of the California Board of Accountancy.

What You Want (and need) to Know about Peer review

The most important thing to know about peer review is that ALL LICENSEES are required to submit a Peer Review Reporting Form to the CBA regardless of the type of work performed, status of license, or industry of employment. Undergoing a peer review and reporting peer review information are two different things, so read carefully to determine your responsibilities.

There’s no doubt you’ve been hearing about Peer Review since at least January 1, 2010. That’s the date Peer Review went into effect, and all California–licensed firms that provide accounting and auditing (A&A) services, including sole proprietorships, were required to undergo a peer review once every three years as a condition of license renewal. Peer review is defined as the study of a firm’s A&A practice by an independent CPA using professional standards.

Want a quick overview of the peer review program?

Going through your first review soon and want to get an idea what’s involved?  Want to figure out how things are working since your last long-ago review?

Check out pages 4 and 5 of the Fall 2012 issue of UPDATE from the California Board of Accountancy. You can find it on this page. A direct link to the PDF is here.

I’ve been a peer reviewer for over a year now and I’m still learning the subtleties of how the program works. I know it is very complicated.  When I walk CPAs through the process, I can tell it is confusing. New forms. New terminology. New report names (pass instead of unqualified).

If you are going through your first peer review or it’s been a long time since you last did so, you’ll find that summary will give you a survey of what’s involved.

Journey through a peer review – field work finished – next step is technical review

Seventh in a series.  Field work wrapped up yesterday for my peer review.  The reviewer gave me a draft report. I can’t discuss it until it is accepted by the Peer Review Committee.

The next step is for the reviewer to finish a bunch of checklists and send them to the technical reviewer.  …

Journey through a peer review – field work is today

Here’s part 6 of the tale of my journey through my peer review.

Today is field work. The reviewer will arrive at my office soon. Expect him to be here most of the day.

Spent a few minutes yesterday pulling together a few more documents I know he will want to see. Also set up an extra computer for his use while he reads a bunch of workpapers.

I won’t be talking about the results of the review for a long time.

Journey through a peer review – initial engagement selection

Part five of my journey through the peer review process.

Since submitting the list of engagements, which I discussed last post, I got back a list of engagements my reviewer wants to look at. He will make an additional surprise selection when he arrives.

He will need a few more things before field work.  I sent him a copy of the financial statements for each of the engagements he selected.

For the audits, I also filled out a profile sheet. You can see the nonprofit form here, assuming you are an AICPA member and can login to their site.

Journey through a peer review – forms to prep for field work

Part 4 of my journey through the peer review process for this cycle.

Well, after signing an engagement letter with the reviewing firm I need to get the initial round of checklists completed.

List of engagements

My peer review year ends May 31. This weekend I accumulated a list of completed engagements for clients whose fiscal year ended within my peer review year. That means I listed my clients whose fiscal year ended between in June 2011 and May 2012. Not when I issued the reports, but the client’s year-end. 

Journey through a peer review – reviewing firm approved

Part 3 of my journey through the peer review process.

Previously I mentioned there’s a 30 day deadline from when my scheduling form was approved until I needed to advise CalCPA which firm I would like to perform my review.

Well, I didn’t hit the 30 day deadline. So two days after the deadline I received a reminder saying I have an extra 15 days.

It’s almost like the administering entities have figured out that CPAs don’t do things until they have a deadline staring them in the face. Imagine that!

I’ve now made arrangements with the firm that will do my review. I filled out Exhibit 1, which only took a few minutes.

Journey through a peer review – initial scheduling form approved

Part 2 of my journey through the peer review process.

Today I received a note that I forgot to answer one question on the Peer Review Scheduling Form.  Oops.

Answered it and returned the form. Same day I received a letter that my initial form had been accepted.  A copy of the 4 pages needed to get a reviewer approved were attached to the letter. These are the last pages in the Scheduling Form, so you will already know what they look like.

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.