Peer Review is a Michigan licensing requirement for firms and/or sole practitioners who perform services that require peer review. Make sure you are in compliance.
2024 Yellow Book
On Feb. 1, 2024, the U.S. Government Accountability Office released its revision of Government Auditing Standards, also known as GAGAS or the Yellow Book. The changes reflect a new, risk-based approach to quality management.
Effective Date
The new quality management standards are effective for financial audits, attestation engagements, and reviews of financial statements as well as performance audits for periods beginning on or after Dec. 15, 2025. A system of quality management that complies with the Yellow Book is required to be designed and implemented by Dec. 15, 2025. An audit organization should complete its evaluation of the system of quality management by Dec. 15, 2026. Early implementation is permitted.
Firms are required to notify the Department of Licensing and Regulatory Affairs (LARA) directly within 30 days of receipt of a Peer Review Fail report or a second consecutive non-pass report. A fail report or second consecutive non-pass report may result in fines.
Notification can be made:
By email at:
bplhelp@michigan.gov
Include “Accounting Peer Review” in the subject line.
Or by writing to:
Bureau of Professional Licensing
PO Box 30670
Lansing, MI 48909
- Michigan firms or sole practitioners that perform audits, reviews and/or compilations. All attest services are subject to peer review.
- Firms must undergo peer review at least once every 3 years.
- A Michigan firm needs to undergo a peer review to obtain their firm license if they perform the above noted services. Peer review is a licensing requirement for firms/or sole practitioners who perform services requiring peer review – Michigan Occupational Code-License Renewal
- Peer Review Process
- Peer Review FAQs
The Peer Review Integrated Management Application (PRIMA) is the primary tool used by firms, reviewers and the entities administering peer review to complete the peer review process. PRIMA is accessible to all AICPA and CPA.com customers whose records are linked to a public accounting firm in the AICPA Peer Review records. Access the links below for PRIMA instruction and information.
No, if preparation engagements are the firm’s “highest level of service”, a peer review is not required and the firm may resign from the Program. If the firm remains enrolled, a peer review would be required.
- There are two types of peer reviews: system reviews and engagement reviews.
- System reviews are for firms that perform audits as their highest level of service.
- Engagement reviews are for firms who perform reviews and/or compilations as their highest level of service.
- Yes, there are 3 levels: PASS, PASS with DEFICIENCIES, and FAIL.
- PASS: The firm’s system of quality control is appropriately designed and complied with by the firm.
- PASS with DEFICIENCIES: The firm’s system is appropriately designed and complied with, except in certain situations that are detailed in the report.
- FAIL: The firm’s system is not suitably designed or is not being complied with.
A nonconforming engagement is an engagement that was not performed and reported on in conformity with applicable professional standards. The firm must determine if the engagement should be corrected and reissued.
The Michigan Association of CPAs (MICPA) administers the AICPA Peer Review program for firms and sole practitioners whose main office is located in Michigan. View Peer Review Fees
Being a Reviewer can give your firm access to an entirely new client pool. In addition, current reviewers have indicated that being a reviewer helps to ensure that their firm is providing services that meet high standards of quality.
- AICPA Ethics
- AICPA Ethics Library - Where you’ll find the Code of Professional Conduct and many tools and resources, such as the Plain English guide to independence, Ethics Questions and Answers, and more.
- AICPA PEEC Projects - Go here to find exposure drafts and comment letters, final releases of new authoritative guidance, and related content.
- AICPA PEEC Meetings - Would you like to stay current with AICPA ethics activities and get CPE credits while you’re at it? Register to attend quarterly PEEC meetings and find a link to PEEC meeting agendas and minutes.
- Joint Enforcement Ethics Program - Details of our investigative process and how we collaborate with state societies to perform joint investigations.
- AICPA File a Complaint - Find out how to file a complaint against an AICPA member.
- Karen Guerra, 248.267.3718
- Bonnie Schmidt, 248.267.3751
- Firm help using PRIMA, 919.402.4502, press 1
- Reviewer help using PRIMA, 919.402.4502, press 2
- Peer Review Assistance Help related to standards, guidance and/or the peer review process (non-PRIMA related questions), 919.402.4502, press 3
- Help related to whether a firm appropriately applied authoritative guidance, Issue Advisory Hotline 919.402.4502, press 4