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1. Create/Maintain a firm environment that fosters the importance of quality control.
   • An environment of quality must start at the top.
   • Clients recognize quality even if they don't understand its technical aspects.
   • Quality is an expectation in today's marketplace.
   • Quality depends on the mutual cooperation of all members of the firm.
   • Stress quality in the firm's mission statement and code of conduct.
   • Remind members of the firm of the importance of quality at firm meetings.

    

2. Establish/Maintain the firm's quality control system.
   • Design a system that reflects the firm's size, number of office locations, and the nature of its practice.
   • Create policies and procedures for each element of quality control:
     • Independence, integrity and objectivity
     • Personnel management
     • Client and engagement acceptance and continuance
     • Engagement performance
     • Monitoring
   • Consider how to document the policies and procedures of your system of quality control. Many firms maintain a written quality control manual, although a written document is not required. Some small firms use the quality control questionnaire that they prepare for their peer review as their quality control document.
     (Sample quality control document template for: regional/local firm  |   sole practitioner) 
   • Select reference materials that match the firm’s audit and accounting practice and industries in which the firm’s clients operate. These should include appropriate access to such material as professional standards, accounting and auditing manuals, checklists, and work programs.
   • Establish a method of communicating the firm's quality control policies and procedures. This method could be in the form of a written quality control document, in unwritten form or in some combination of the two.
   • Monitor the design of the firm's policies and procedures, taking into account changes in the nature of the firm's practice and personnel. 
      

3. Communicate the firm's system of quality to all members of the firm.
   • Determine that all personnel are aware of the firm's standards of quality.
   • Determine that personnel understand how to implement the firm's standards properly.
   • Determine that personnel know where and who to go with questions.
      

4. Consider the benefits of consulting with an outside reviewer to evaluate specific elements of the design of the firms’ system of quality control .
    
5. Select a peer review "year end."
   • The year end may be any date you choose and can be the same or different from the firm’s business year-end.
   • Consider client commitments, seasonal workload and availability of personnel in selecting the peer review year-end.
   • The peer review normally occurs about three months after the year end.
   • The review must be completed by the due date regardless of the year end. Although it's preferable for a reviewer to start your review within three months after your peer review year end, this is not a strict requirement.
   • Subsequent peer review year ends may be adjusted by up to three months without peer review administering entity's approval, but it's best to maintain a consistent year end.
      

6. Select a firm member who will have primary responsibility for:
   • Monitoring the firm’s compliance with its system of quality control.
   • Coordinating changes in the firm’s quality control policies or procedures.
   • Scheduling the review.
   • Selecting and contracting with a reviewer.
   • Serving as the firm's primary representative during the peer review.
   • Arranging the exit conference. 
   • Responding to the reviewer's letter of comments.
      

7. Enroll in the applicable Peer Review Program.
• AICPA Peer Review Program
• Center for Public Company Audit Firms Peer Program

Next: Part 2 - Tasks to Perform Between Reviews

Peer Review Guide > How to Prepare for a Peer Review > Initial QC Considerations

© 1997-2003, Duane Reyhl
E-mail: dreyhl@reyhl.com
Updated February 5, 2006