Overview of Peer Review Process and Requirements for PCPS Member Firms and the Quality Control Standards:

Peer Review Process and Requirements for PCPS Member Firms:

Since PCPS and its member firms strive for commitment to quality, a membership requirement of PCPS member firms is that they must:

1.    Be enrolled in an approved AICPA practice monitoring program and

2.    Have their peer reviews performed under the AICPA Peer Review Program or the Center for Public Company Audit Firms Peer Review Program 

3.    Provide PCPS their peer review results which are posted to the AICPA Peer Review Public File and include the firm's most recent peer review report, letter of response (if applicable) and letter of acceptance, (and, if prior to Jan. 1, 2009, the letter of comments (if any)).

Note:  Not all AICPA member firms peer review results are posted to the AICPA Peer Review Public File.  Posting is only required for member firms of certain sections within the AICPA (i.e., PCPS, EBP, GAQC and CAQ).

Firms that are active in the practice of public accounting fall under this peer review requirement as follows (source: AICPA Standards for Performing and Reporting on Peer Reviews)

• Firms that perform engagements under the SASs (i.e. audits) or Government Auditing Standards, examinations of prospective financial statements under the SSAEs, or audits of non-SEC issuers performed pursuant to the standards of the PCAOB have peer reviews called System Reviews.

o      A System Review includes determining whether the firm’s system of quality control for its accounting and auditing practice is designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards, including SQCS No. 7, in all material respects.

o      The majority of the procedures in a System Review should be performed at the reviewed firm’s office.

• Firms that only perform services under SSARS (i.e. reviews and/or compilations) or services under the SSAEs not included in System Reviews have peer reviews called Engagement Reviews.

o      The objective of an Engagement Review is to evaluate whether engagements submitted for review are performed and reported on in conformity with applicable professional standards in all material respects.

o      An Engagement Review consists of reading the financial statements or information submitted by the reviewed firm and the accountant’s report thereon, together with certain background information and representations and, except for compilation engagements performed under SSARS, the applicable documentation required by professional standards.

o      Engagement Reviews are normally performed at a location other than the reviewed firm’s office.

Note:  If your firm does not have an accounting and auditing practice and therefore does not perform services that include issuing reports purporting to be in accordance with AICPA professional standards, this requirement does not apply to your firm.

Determine your peer review requirement and get started!

·         Peer Review Decision Tree

·         Peer Review Process Checklist – System Review

·         Peer Review Process Checklist – Engagement Review

By enrolling, a firm agrees

·         to comply with the AICPA's quality control standards (SQCS No 7). (see below)

·         to have a peer review of its accounting and auditing practice every three years.

·         at least one owner of the firm must be an AICPA member in order to enroll in the AICPA Peer Review Program.

For further, more detailed information on the AICPA Peer Review Program, see also:

Quality Control Standards:

Firms that are enrolled in an AICPA approved practice-monitoring program are obligated to adhere to quality control standards established by the AICPA.