Peer reviews are required of all CPA firms that are members of the AICPA, and audit committees often use the peer reviews as a way to assess whether they should hire a particular firm. Therefore, finding the reviewer – someone who is independent, experienced and the “right fit” for your firm – is critical.
The AICPA recently offered guidelines for choosing a peer reviewer so that in the end, your firm has gone through an efficient process that improves quality control policies and procedures. Reviewers must follow the procedures of the AICPA Peer Review Board, which issued revised standards that have been in effect since Jan. 1.
- Search the AICPA database of reviewers. The directory lists whether the reviewer is enrolled in the AICPA Peer Review Program and other information, but it is the firm’s responsibility to make sure the reviewer is qualified. Firms can also ask other CPAs with similar practices for recommendations as well.
- For firm-on-firm reviews, find a reviewer whose practice is similar to your own and who has experience in the key practice areas of your own firm. (The AIPCA adds, however, “Slightly larger firms may have a different insight and solutions to offer regarding practice problems, since they may have already solved these issues within their own firm.”)
- Send out requests for proposals six to ninth months prior to the review to provide time to evaluate the proposals.
· Consider asking the following questions to interested firms—How does the reviewer's firm's size compare in terms of billings and number of personnel? What size are its clients? Does it specialize in the same industries and have the same depth of knowledge in those areas? Does it perform similar kinds of other engagements?
- Ask for a copy of the peer review report of the reviewer’s firm.
- Consider costs, but price should not be the only criteria. Some reviewers can offer “value-added” services, which are separate from the peer review, but can analyze hiring practices, technology, billing or other matters.
Read the entire AICPA article.