Yudu - May 2015

FOCUS on peer review

Peer Review Program Changes Proposed

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that seeks input on the CPA profession’s practice monitoring of the future. Te paper, “Evolving the CPA Profession’s Peer Review Program for the Future,” paints a picture of how the existing peer review program for firms’ accounting and auditing engagements could be transformed into a technology-driven, near real-time practice monitoring process. “Peer review is at the heart of the profession’s commitment to enhancing the quality of accounting and auditing services. It has evolved over the course of 35 years to ably serve the profession and the public,” said AICPA President and CEO Barry C. Melancon, CPA, CGMA. “Te concept paper, provocative by design, presents a significant leap forward in practice monitoring. It challenges the profession and its stakeholders to imagine a more timely and transparent process that offers insights into quality, in some instances even before an engagement is completed.” Te concept as currently envisioned will morph based on feedback from the paper and from pilot participants, and as technology evolves. Te concept’s primary goal is to increase public protection through enhanced accounting and auditing effectiveness by:  Highlighting potential quality risk indicators and detecting engagement issues earlier;

 Reviewing all firms that perform accounting, auditing and attestation engagements; and

 Monitoring all engagements subject to review.

As currently designed, the concept would be powered by five activities:

16 CPAFOCUS May/June 2015

nveiling a vision of what peer review could become, the American Institute of CPAs (AICPA) issued a concept paper

1. Continuous analytical evaluation of engagement performance;

2. Human review when system-identified concerns are raised;

3. Involvement of external monitors, when necessary;

4. Periodic inspection of system integrity; and 5. Oversight of the system’s operating effectiveness.

“We believe this visionary concept has the potential to elevate the quality of the profession’s work by using new technological approaches, creating greater transparency and establishing more connection points between the CPA firm, the reviewer and the AICPA,” explained AICPA Senior Vice President, Public Practice & Global Alliances Susan S. Coffey, CPA, CGMA. “I urge all interested parties to join the dialogue to help shape practice monitoring of the future.” (Editor’s Note: Don’t miss Susan Coffey at the 2015 OSCPA Annual Members Meeting on June 5, 2015, at the Downtown Tulsa Hyatt Regency.) Te AICPA expects that the practice monitoring concept would be developed and implemented in multiple phases. During the first phase, monitoring tools would be developed and piloted by a select voluntary group of small, medium and large firms. Troughout the pilot, the AICPA would work with the pilot firms and peer reviewers to consider how to incorporate the concept’s new tools into a more robust interim peer review process. Te paper can be downloaded at http:// community.aicpa.org/future-practice-monitoring/ default.aspx. Stakeholders are invited to provide comments and respond to questions on the AICPA Community site (aicpa.org/ futurepracticemonitoring). You may also email comments to prsupport@aicpa.org. Te comment deadline is June 15, 2015.