Nature and Purpose of a Peer Review Auditing
Molly Stinn, CPA explains what a peer review is and gives an update on Corrigan Krause's most recent peer review findings.
The purpose of a peer review is to promote quality in the bookkeeping and auditing services provided by CPA firms. Peer reviews ensure that CPA firms are preforming at a loftier standard and offer firms opportunities to meliorate the quality of their services and processes.
What are peer reviews?
Members of the American Institute of Certified Public Accountants (AICPA) approved a proposal that requires AICPA members to participate in a practise-monitoring programme in 1988, which led to today's peer review programme.
According to the AICPA PR Summary, "peer review helps to monitor a CPA house's bookkeeping and auditing practice (practice monitoring). The goal of the exercise monitoring, and the program itself, is to promote quality in the accounting and auditing services provided past the AICPA members and their CPA firms. This goal serves the public interest and enhances the significance of AICPA membership."
There are two types of peer reviews, System Reviews and Engagement Reviews. System Reviews focus on a firm'due south arrangement of quality command and Engagement Reviews focus on work performed on particular selected engagements.
Why practise we do them?
As a fellow member of the American Institute of Certified Public Accountants (AICPA), firms are required to have an outside peer review of quality control procedures every three years.
Who conducts peer reviews?
Licensed CPAs who meet specific requirements and have completed the proper preparation can become a peer reviewer.
Requirements include:
- Exist a member of the AICPA in good standing, licensed to exercise as a CPA.
- Be currently active in public practice at a supervisory level in the accounting or auditing function of a firm enrolled in the program, as a partner of the business firm, or every bit a manager or person with equivalent supervisory responsibilities.
- Be associated with a firm that has received a report with the peer review rating of laissez passer for its most recent System or Date Review that was accepted timely, usually within the last three years and six months.
- Possess electric current knowledge of professional standards applicable to the kind of practice to be reviewed, including quality control and peer review standards.
- Accept at least five years of contempo feel in the practice of public accounting in the accounting or auditing office.
- Accept provided the administering entity with data that accurately reflects the qualification of the reviewer including recent manufacture feel, which is updated on a timely footing.
- Obtain at to the lowest degree 40% of the AICPA required CPE in subjects relating to accounting, auditing, and quality control. Peer reviewers should obtain at to the lowest degree 8 hours in whatever 1 year and 48 hours every iii years.
What are the benefits of peer reviews?
There are many benefits of peer reviews for both clients of CPA firms and the reviewed CPA firms, including:
- Ensure loftier quality services are provided to clients
- Review and optimize internal processes
- Provides firms with insights and recommendations for efficiency improvements
The Corrigan Krause team is pleased to denote the successful completion of an independent peer review of our accounting and auditing practice. Corrigan Krause received a pass rating, the highest rating available. Firms can receive a rating of laissez passer, pass with deficiency (ies) or fail. Thank you to Warady & Davis LLP for conducting our peer review and providing us with valuable insights. We are formally evaluated every three years but internally we review our quality controls every year. Peer reviews allow usa to continue to meliorate upon our client services and serve you better.
In addition, Molly Stinn meets all necessary requirements to bear peer reviews for other firms. For more information, please accomplish out to usa regarding our peer review capabilities.
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Source: https://corrigankrause.com/peer-reviews-audits-auditors/#:~:text=The%20purpose%20of%20a%20peer,of%20their%20services%20and%20processes.
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