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Kondler CPA

CPA Peer Review

In the field of accounting, peer review is the review of the work of one CPA or CPA firm by another CPA or CPA firm. The review process includes looking at working papers and accounting procedures the CPA firm follows. It constitutes a form of self-regulation by qualified members of a profession within the relevant field. Peer review methods are employed to maintain standards of quality, improve performance, and provide credibility.

CPA firms have peer reviews because of the public interest in the quality of accounting, auditing and attestation services. Also, 46 state boards require their licensees to undergo peer review, or “compliance assurance,” to practice in their state. Other regulators, such as the Government Accountability Office, require peer review to perform engagements and to issue reports under their standards.

CPA firms and individuals enrolled in the AICPA Peer Review Program are required to have a peer review, applicable to non-SEC issuers, once every three years covering a one-year period. Mandatory peer review applies to a CPA firm’s accounting and auditing services, but not to tax and management advisory services.

The purpose and ultimate goal of the peer review, practice monitoring, and the program itself, is to promote quality in accounting and auditing services provided by AICPA members and their CPA firms. It also helps to assure that quality controls are being applied in conformity with the AICPA Quality Control Standards. This goal serves the public interest and enhances the significance of AICPA membership.

The following is involved in the peer review process when appraising a CPA firm’s quality control policies and procedures:

  • Reviewing each organizational or functional level within the firm;
  • Reviewing selected engagement working paper files and reports; and
  • Reviewing documentation indicating the firm’s compliance with membership requirements.

At the completion of the peer review, the reviewer discusses the findings with the reviewee and issues a report. Sanctions may be imposed on deficient CPA firms including continuing professional education (CPE) training, censures and reprimands, fines, and suspension from membership.

Firms have the option to make their own peer review reports public once those reports are accepted by the applicable body. In some cases, firms are required by regulators, or under certain AICPA section or audit quality center membership rules, to make their reports public.


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