At its meeting last month, the AICPA Peer Review Board adopted revisions for the AICPA Standards for Performing and Reporting on Peer Reviews (Standards). Press releases, publications and other membership communications about the revisions are in process, but here is a preview of the new standards:
All changes will be effective January 1, 2001.
There will be three types of peer reviews:
- System Review: Essentially the same as the old on-site peer review, this is for firms performing engagements under the SASs and/or examinations under SSAEs of prospective financial information.
- Engagement Review: For firms not required to have a System review, similar to the old off-site peer review. Additional objectives will include determination of whether the working paper documentation is in compliance with the SSAE's and SSARS in all material respects.
- Report Review: Suitable for firms that only perform compilations that omit substantially all disclosures. A technical review will be required, and the administering entity can impose monitoring actions on the firm being reviewed.
Additional revisions include:
- Administrative guidance on billing issues will be forthcoming for Committee Appointed Review Teams.
- Individuals designated as reviewers must be approved by the entity administering the review.
- Guidance on handling disagreements is forthcoming.
- If a firm's most recent review was a report review, the firms members are not eligible to perform peer reviews, nor ar ethey eligible to be charged with the responsibility for acceptance of any reviews.
More guidance will be forthcoming from the Peer Review Board in the coming months.