Peer Review News

Special Notice from the AICPA Peer Review Team

by AICPA | Mar 02, 2016   ()
Earlier this year, the Department of Labor (DOL) and the AICPA Peer Review Program embarked on a joint initiative to ensure that CPA firms associated with an ERISA plan audit had correctly included the ERISA engagement(s) in their most recent peer review.  Unfortunately, the joint initiative identified numerous firms that had omitted the engagement from their peer review.

We are fully investigating each of those instances, and we want to help all firms ensure the completeness of their engagement population.

As a result of the initiative, and as part of our continuing commitment to audit quality, we have revised existing guidance for firms and reviewers, and we have provided training to reviewers and administering entities.  We have also developed additional resource materials for  administering entities.

Here are some important steps that your firm can take to plan your peer review so that it includes a complete engagement population.

Risk mitigation steps for your firm
• Identify all applicable levels of service and industries on the peer review scheduling form (Information Required for Scheduling Reviews form).
• Include all engagements that have been performed or are expected to be performed with period ending within your firm’s peer review year on the list of engagements (system reviews) or Engagement Summary Form (engagement reviews).
• A firm representative must sign a representation letter indicating that the information regarding your firm’s engagements is complete. This letter will be retained by the administering entity until your firm’s subsequent peer review has been completed.

Cascading negative effects of errors on or omissions of engagements
Here are a few examples of how an incomplete engagement population could affect your firm’s peer review:
• Errors on or omissions of engagements could lead to a peer review that is not performed in accordance with Standards for Performing and Reporting on Peer Reviews (standards).
• If the error or omission represents a material departure from the standards, your firm’s acceptance letter for that peer review will be recalled.
• If your acceptance letter is recalled, administering entities will notify applicable state boards of accountancy of the change in the acceptance date of your firm’s most recent peer review.
• If your acceptance letter is recalled, your firm may be required to have a replacement review performed timely. For reviews that commenced after April 1, 2014, your firm will be subject to a hearing panel to determine whether your firm’s enrollment in the program will be terminated.
• Failure to have the replacement review submitted timely will be considered a matter of noncooperation, which will result in your firm’s enrollment in the program being dropped or terminated.

For more information
The AICPA’s Peer Review Team is committed to helping practitioners meet their Peer Review requirements in a timely and complete manner, and has developed enhanced practice aids and guidance for reviewers to use to help enrolled firms.  
For additional information, click here or contact the AICPA Peer Review Hotline via email at prptechnical@aicpa.org or phone at 919.402.4502, option 3.

Sincerely,
The AICPA Peer Review Team
919.402.4502
Source: AICPA
Source: AICPA