Peer review

Checks and balances for CPA firms that audit non-SEC registrants

• The profession has taken steps to ensure the quality of the audit. Firms and individual licensees who conduct audits are required to enroll in a peer review program and register with the Accountancy Board of the State of Ohio. Likewise, firms that engage in the practice of public accounting must register with the Accountancy Board. Firms which audit publicly traded companies must be members of the SEC Practice Section of the American Institute of CPAs.
  
  
• Peer review is a periodic outside review of a firm's quality control system in accounting and auditing with the goal of maintaining and improving the quality of these services. Reviews are done as firms not as individual CPAs.
  
  
• Peer review is a statutory requirement for all Ohio CPA firms that provide attest services (audit, review, compilation), as well as membership in the AICPA and The Ohio Society of CPAs.
  
  
• Peer review is designed to review a firm's internal quality control program and application of professional standards on a comprehensive basis.
  
  
• The ultimate goal of peer review is to prevent problems with the audit by keeping CPAs educated about auditing standards and identifying action steps firms should take to improve their service. However, several actions may be taken if a firm has a poor review. They are as follows: the peer review committee may ask individuals in the firm to take a certain amount of targeted continuing professional education, a firm may have an accelerated review (normally firms must be reviewed at least once every three years.), the firm may be required to have all newly issued audit reports reviewed by another firm for a period of time, or an outside inspection may be conducted.
  
  
• The following are the most recent statistics for The Ohio Society of CPAs Peer Review program in which 527 reviews were completed:

1. 303 reviews that received an Unqualified Report with a Letter of Comment
2. 194 reviews that received an Unqualified Report without a Letter of Comment
3. 28 reviews that received a Modified Report
4. 2 reviews that received an Adverse Report

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