A task force of the American Institute of CPAs released a set of recommendations to enhance the transparency of the institute's peer review system for the industry's public accounting sector.
"Just as the CPA profession has evolved to meet changing needs, the task force believes that the peer review system should evolve, too," said AICPA board member Lee Wunschel, who chaired the task force, in a statement. "In particular, we have sought ways to incorporate valuable member insights in our recommendations to make peer review reports more usable and transparent, which is critical in today's era of increased accountability."
Peer review became mandatory in 1988, Wunschel said, and after nearly two decades, is due for a makeover.
Among other changes, the task force recommended that:
- Peer review reports should be as concise as possible and written in plain English;
- The objectives, procedures and results of peer review be publicly released through AICPA reports, as well as the state CPA societies that conduct reviews;
- All state boards of accountancy should require peer review as a condition of licensure; and,
- The AICPA should conduct a peer reviewer recruitment campaign.
The recommendations are being submitted to the Peer Review Board for consideration, and possible execution. At March Council, the AICPA Board will recommend that peer review reports of firms be provided to state boards in those states where peer review is required for continual licensure.Forty-one state CPA societies now administer the AICPA Peer Review Program and 39 states require peer review as a condition of licensure -- nearly half requiring some form of results disclosure.
The full task force report is available at www.aicpa.org/transparency. The group included representation from small, midsized and large CPA firms, business and industry, state CPA society leadership, and state regulators.
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