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Peer Review Guide > Standards for Performing and Reporting on Peer Reviews > History

The Standards for Performing and Reporting on Peer Reviews are established by the AICPA Peer Review Board (the Board). These standards apply to all peer review performed under the AICPA Peer Review program (AICPA PRP).

1999 Revisions to the Standards
     System review
     Engagement review
     Report review

2004 Revisions to the Standards

1999 Revisions to the Standards

In October 1999, the American Institute of Certified Public Accountants (AICPA) Peer Review Board adopted revisions to the AICPA Standards for Performing and Reporting on Peer Reviews. The revised standards that became effective January 1, 2001. Early implementation was not permitted. In summary, the revised standards created the following three levels of peer reviews:

System Review

This became the name of the existing on-site peer review and applied to firms that performed engagements under: :

• Statements on Auditing Standards (SASs)
• Government Auditing Standards (the yellow book), issued by the U.S. General Accounting Office, or
• Examinations of prospective financial information under the Statements on Standards for Attestation Engagements (SSAEs)

Firms eligible for engagement review or a report review could elect to have a system review. In considering the change in name from an on-site peer review to a system review, the AICPA Peer Review Board considered the comments received during the exposure draft’s comment period and concluded that the new terminology more accurately described the type of peer review since the reviewer expresses an opinion on the firm’s system of quality control.

Like the previous on-site review, a system review includes a separate report, letter of comments (if applicable), letter of response, technical review, committee acceptance, and monitoring actions (if considered appropriate.) A system review is intended to provide the reviewer with a reasonable basis for expressing an opinion whether—for the year under review—the reviewed firm:

• Has designed its system of quality control for its accounting and auditing practice in accordance with AICPA quality control standards.

Engagement Review

This level of peer review replaced the existing off-site review with two basic exceptions: :

• Firms that performed only compilation engagements that omit substantially all disclosures are subject only to a report review, which is described below. (Although inclusion of selected disclosures for financial statements that otherwise omit substantially all disclosures are still subject to an engagement review.)
• Second, an engagement review carry an additional objective to assess whether working paper documentation conformed with the requirements of SSARS and SSAEs, as applicable to those engagements. An engagement review provides no opinion on the reviewed firm’s system of quality control and therefore the reviewer is not opining on the firm’s compliance with its own quality control policies and procedures or with AICPA quality control standards, just conformity with SSARS and the SSAEs.

Since an engagement review does not require a firm to document any work other than that required by the SSARS or SSAEs, the peer reviewer only expresses limited assurance on whether the firm’s documentation conforms with those standards. Some examples of the documentation that a reviewer would consider in his or her procedures include:

• Management representation letter on review engagements
• Documentation of the matters covered in the accountant’s inquiry and analytical procedures in a review engagement.
• Documentation as may be required by SSAEs, such as might have been the case in a WebTrust engagement.

As with a system review and the former off-site review, an engagement review still included a report, letter of comments (if applicable), letter of response, technical review, committee acceptance, and monitoring actions (if considered appropriate.)