The Steps of a Peer Review

“Accountants reviewing other accountants work” is the what most people would say if you asked them about the peer review process. A public accounting firm completes client accounting and audit working papers; every three years, another accountant comes in and spot checks those working papers to ensure the firm is conducting work in accordance with standards. That is just the tip of the iceberg when it comes to peer review.

The actual peer review process starts much earlier than an accountant reviewing another accountant’s firm and involves many more people than your accounting firm and the peer accountant reviewing your firm. About seven months, or 210 days before your peer review is due, PRIMA (Peer Review Integrated Management Application) will send your peer review contact an email letting your firm know your peer review is due in six months and you need to complete your Peer Review Information (PRI) case. PRIMA is a new website that was launched by the AICPA in May 2017 to assist administering entities with the administration of peer reviews. Depending on the types of engagements you perform and the location of your firm, your peer review administering entity is either The Georgia Society of CPAs, or the AICPA. Once you complete your PRI, your administering entity will receive a notification to approve your information, so you can move on to the next step in the peer review process – scheduling.

Scheduling your peer review is also done within the PRIMA website. Once your PRI is approved, PRIMA will send your peer review contact another email letting you know your scheduling case is ready for you to complete. Before you complete your scheduling case, ensure you have contacted the peer reviewer you would like to complete your review, make sure they have the necessary qualifications to review your firm’s engagements, and have availability to complete your peer review in the designated time frame. When determining the time frame for completing your peer review, a firm should consider if an extension is needed, due to things like loss of personnel, or illness. If an extension is needed, it should be requested a minimum 30 days prior to the firm’s peer review due date. Once the time frame has been confirmed, your peer review contact should enter all information into PRIMA, where it is first sent to your peer reviewer, to confirm they are independent, then to the administering entity for approval. After that has been approved, the next step is the actual peer review.

Where your peer review takes place is dependent on the types of engagements your firm performs. For firms that perform compilations and/or reviews, your firm will undergo an engagement review, which can be done off-site or on-site. For firms that perform more labor-intensive engagements, such as audits or agreed upon procedures, a system review is required, and must be done on-site. The length of time your peer review takes is dependent upon the types of engagements and industries your firm does work in and can require multiple visits by your peer reviewer. Once the peer reviewer has everything done, they will have a closing meeting with your peer review contact to discuss issues discovered during the process and examine best practices and upcoming changes to standards. Your firm is given time to respond to the issues presented at the closing meeting, and once the firm feels like they have adequate solutions to any issues discussed, an exit conference is held to go over the plan with the peer reviewer.

After meeting, the peer reviewer will begin to enter information from your peer review into PRIMA. You will receive notifications when the peer reviewer enters information into the website that requires your action. After everything is submitted, your administering entity is notified and routes your review to a technical reviewer. A technical reviewer is a peer reviewer that has additional qualifications and reviews your peer reviewer’s work. The technical reviewer will sometimes ask questions of your peer reviewer to better understand what was considered and discussed in your firm’s peer review. Once the technical reviewer has assessed the peer reviewer’s work, it is sent to the administering entity and assigned to a Report Acceptance Body, or RAB.

An administering entity’s RAB is comprised of four rotating volunteers that have peer review captain training. These volunteers meet once per month to review, accept, or request more information from a peer review captain regarding any review. The RAB volunteers are required to be independent, and sign confidentiality agreements. As RABs are comprised of volunteers, meetings are occasionally rescheduled due to conflicts, and peer review acceptance does not happen when initially scheduled. Should your firm find itself in an instance where a peer review acceptance is needed for licensing or other reason, you can contact your administering entity to request to send certain pieces of information to outside third parties. Once a RAB reviews, discusses, and votes on a peer review, a firm will be notified within 14 days of the meeting as to the RAB decision. Additional work may be required by your firm, depending on the RABs evaluation, but the administering entity can help you understand what is required of you, and how to comply.

Jessica Mytrohovich, CPA is the director of finance and technical services for The Georgia Society of CPAs and has been with GSCPA since 2014. She is responsible for accounting, professional ethics, human resources, and peer review at the Society.