AICPA issues revised peer review standards
The AICPA Peer Review Board issued new standards for performing and reporting on peer reviews to promote quality in CPA firms’ accounting and auditing practices.
The new standards are intended to produce simpler more readable reports that will provide greater transparency to state boards of accountancy, federal agencies and the private sector. The standards are written to be more principles-based and less of a “checklist-based process.”
A key difference in the new standards is eliminating comment letters and the three-tier system of “unmodified, modified and adverse” grades given to firms by reviewers. The new standards require a simple “pass, pass with deficiencies, or fail” grade.
The new reports are more user-friendly and clearly indicate whether a firm has satisfactorily designed a quality control system and is complying with that system. The reports will make clear whether a firm has deficiencies in that system, or whether it has no system at all.
The AICPA will release additional guidance specifically for firms that are subject to peer review.
The revised Standards and Interpretations are effective for peer reviews commencing on or after Jan. 1, 2009, and are available on the AICPA Peer Review Program and CPCAF Peer Review Program Web sites.
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LAST UPDATED 5/7/2008