Peer Review Developments from 2003

Peer Review Guide

Peer Review Guide > What's New in Peer Review > Peer Review Developments from 2003

This is a summary of some of the 2003 developments that occurred in peer review. Some of the information on this page may be superseded by information or guidance that has occurred after 2003. Therefore, this information should be viewed as a summary of historical events that may be useful as a starting point for research.

Developments from 2006 2005 2004

2003

Peer Reviewers' Alert (June 2003)
Peer Review Exposure Draft Issued (May 30, 2003)
Peer Reviewer Checklists (2003)
Quality Control Standards No. 4 and 5 Issued by the ASB
Independence, Integrity, and Objectivity
Non-CPA Owned Entities
Leased Employees
Guidance on Inconsistent Language ("conform/comply")

Peer Reviewers' Alert (issued June 2003)

Download from the AICPA web site

This alert provided current information as it pertains to performing peer reviews under the AICPA Peer Review Program.

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Peer Review Exposure Draft (issued May 30, 2003)

Exposure draft from the AICPA web site

This proposed standard, if adopted, would become effective for peer reviews performed on or after January 1, 2005. This exposure draft is the result of the AICPA Peer Review Board's reevaluation of the administration, performance, reporting objectives and overall effectiveness of system reviews. Comments on the proposed standard are due by August 8, 2003.

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Peer Reviewer Checklists (2003)

The AICPA provides team captain, engagement, and other checklists at its web site.

AICPA Peer Review Program system review checklists

AICPA Peer review Program engagement and report review checklists

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Quality Control Standards No. 4 and 5 Issued by the ASB

Summary of:

Statement on Quality Control Standard No. 4:
Amendment to SQCS No. 2
Statement on Quality Control Standard No. 5:
The Personnel Management Element of a Firm's System of Quality Control--Competencies Required by a Practitioner-in-Charge of an Attest Engagement
Statements of Quality Control No. 2 and No. 3

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Independence, Integrity, and Objectivity

Interpretation No. 5 – Independence, Integrity, and Objectivity

The AICPA Peer Review Board has issued Interpretation No. 5 – Independence, Integrity, and Objectivity that provides numerous examples that illustrate how the independence, integrity and objectivity requirements of Standards for Performing and Reporting on Peer Reviews are to be implemented.
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Non-CPA Owned Entities

Issues Related to Peer Reviews Involving Non-CPA Owned Entities Closely Aligned with a CPA Firm

Many arrangement exist where certain portions of the reviewed firm’s system of quality control reside at or operate in conjunction with the system of control of a non-CPA owned entity with which the CPA firm is closely aligned through common employment, leasing of employees, equipment, facilities, or similar arrangements. The AICPA Peer Review Program Manual (PRP) includes a new Section 5000 that includes several subsections to help the reviewer assess the system of quality control in these circumstances. Specifically, the following three sections have been added::

PRP Section 5100: Quality Control Policies and Procedures Questionnaire for Non-CPA Owned Entities Closely Aligned With a CPA Firm

PRP Section 5200: Guidelines for Review of Quality Control Policies and Procedures Questionnaire for Non-CPA Owned Entities Closely Aligned With a CPA Firm

PRP Section 5300: Staff Interview Questionnaire For Non-CPA Owned Entities Closely Aligned With a CPA Firm

Conforming changes related to this topic have also been incorporated into applicable sections of the PRP manual and checklists.

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Leased Employees

Leased employees are incorporated into the guidance for the definition of a professional. In summary, professionals are considered those who devote at least 25% of their time at the reviewed firm in performing audits, reviews, compilations, or other attest engagements, or those professionals who have the partner/manager level responsibility for the overall supervision and review of such engagements. Where applicable, consideration of leased employees has been incorporated in the appropriate PRP manual.

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Guidance on Inconsistent Language ("conform/comply")

Numerous sections within the Standards for Performing and Reporting on Peer Reviews and the AICPA Peer Review Program Manual use the words "comply" and "conform." There are some inconsistencies in the Standards and between the Standards and the guidance that have caused confusion to peer reviewers and the administering entities. It appears that throughout almost all of the explanatory portions of the Standards the word "comply" refers to the system of quality control and the word "conform" refers to professional standards. However, none of the Report examples in the Standards uses the word "conform" as it is discussed previously in the Standards. Guidance material in the Peer Review Program Manual also reflects examples of the inconsistencies.

The Board decided that this was not a significant issue as the meanings of these words are basically identical and that the matter could just be corrected in the next update to the AICPA Peer Review Program Manual. The Board indicated that there should be no need to request revisions from peer reviewers. Feedback could be issued explaining that "comply" refers to the system of quality control and "conform" refers to professional standards.

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Peer Review Guide > What's New in Peer Review > Peer Review Developments from 2003