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Peer Review Facts

Types of Peer Review
There are two types of peer reviews – system and engagement. An accounting and auditing practice is defined as all of a CPA firm’s engagements that are covered by AICPA SASs, SSARSs, and SSAEs and Government Auditing Standards issued by the U.S. General Accounting Office.

What is a system review?
This type of review is for firms that perform engagements under the SASs, the Government Auditing Standards or examinations of prospective financial information under the SSAEs.

What is an engagement review?
This type of review is for firms that are not required to have system reviews. The objectives of an engagement review are to provide the peer reviewer with a reasonable basis for expressing limited assurance of conformity with professional standards and requirements of SSARSs and SSAEs.  Firms performing only compilations that omit substantially all disclosures are eligible to have engagement reviews, as well as firms that perform compilations referred to in SSARS.

Can I have an engagement review if my firm has only one audit?
No. You must have a system review even if your firm performs only one audit.

What types of engagements does a system review cover?
A system review should cover a firm’s accounting and auditing practice. The scope of the peer review does not encompass other practice segments, such as tax or management advisory services, except to the extent they are associated with financial statements.

How do I switch from an engagement review to a system review (or vice versa) because I acquire or give up an audit engagement?
You will indicate the types of engagements you perform on your Peer Review Information case in PRIMA.
NOTE: If you are currently having an engagement review and your firm accepts their first audit engagement you are required to notify the administering entity (INCPAS) immediately and must undergo a system review. This system review ordinarily would be due 18 months from the year-end of the engagement requiring a system review or by the firm’s next scheduled due date, whichever is earlier.
Please reference paragraph .14 of the AICPA Standards for Performing and Reporting on Peer Reviews and 14-1 of the AICPA Peer Review Standards Interpretations.

How much will the peer review cost?
Reviewers typically charge regular hourly rates for time spent conducting peer reviews. In addition, firms pay an annual administrative fee to the administering entity.

Are there ways to reduce the costs of my peer review?
Yes. The best way to reduce costs is to have complete, accurate information available for the reviewer(s). Also make sure everyone understands the importance of performing engagements in accordance with professional standards, and properly documenting engagement planning issues, key procedures and conclusions.

How Confidential are Peer Reviews?
A peer review must be conducted in compliance with the AICPA Code of Professional Conduct. Information concerning the reviewed firm or any of its clients or personnel, including the findings of the review, is confidential.

How can I find out more about the Peer Review Process?
Having a current AICPA Peer Review Program Manual is a key tool for the successful completion of a peer review. The Manual contains guidance on how to prepare for the Peer Review and includes the standards that govern peer reviews. 

For questions about the AICPA Peer Review Program, contact the INCPAS Peer Review Department at (317) 726-5000 or e-mail