It's no coincidence that within the past year both the New York State Society of CPAs and the American Institute of CPAs have formed committees to examine the accounting profession's peer review program. The process, as it is structured now, no longer responds to all the demands placed on it, especially by the public. The NYSSCPA and the AICPA know that the profession needs to quickly step up to the plate and make reforms to the program, before the government makes reforms for us.Alert to this need, the NYSSCPA formed the Quality Enhancement Policy Committee with the express purpose of ensuring that peer review is meeting the needs of the current environment. Understanding that practical implementation issues could alter some of its recommendations, the QEPC chose to first establish, on a conceptual level, the tenets of an ideal peer review system.
After two years of extensive deliberation and a thorough review of a wide range of sources and inputs, the QEPC determined that one of peer review's most basic components - the choice, training and background of the "peers" who actually perform the reviews - is also one of its most fundamental flaws. The QEPC focused on three particularly troubling aspects of this issue: the way in which firms select peer reviewers, their qualifications, and the current concentration of firms that perform peer review.
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