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Peer Review Guide > Common Peer Review Budgets > System Reviews Peer Review Budgets - System Reviews A budget is based on the actual time it typically takes a reviewer to perform the peer review. This time includes planning, performance, the exit conference and report writing. In addition, for system reviews, travel time and out-of-pocket expenses may be incurred. The rates and fees charged for a firm-on-firm review are negotiated directly between the firm and reviewer. The actual cost of a peer review depends on the complexity of the matters that arise during the review and the time the firm has spent preparing for its peer review. System review budgets are derived from an estimate of the firm’s audit and accounting (A and A) hours. The hours should not include time for the firm's write-up or bookkeeping work. The original budget should be adjusted by the reviewer if the actual A and A hours are different than the hours originally submitted by the firm. The chart below shows the typical budget ranges for system reviews. (Helpful hint: When determining the auditing and accounting hours, and the hours for write-up (bookkeeping) or tax work is not known, the A&A hours can be estimated.) The direct cost of a system review for an average firm will vary between $1,500 and $3,500 depending on the size and nature of your firm's accounting and auditing practice. In addition to the review costs that will be incurred every three years, firms may also pay an annual administrative fee to the administering entity to cover the costs of running the program and, in some states, in the review year, fees for scheduling the review and evaluating the results of the review.
Related topic: Engagement review budgets Peer Review Guide > Common Peer Review Budgets > System Reviews © 1997-2004, Duane Reyhl, CPA E-mail: dreyhl@reyhl.com |