Plan Ahead to Pass Your Peer Review
Peer review comes around every three years, but it’s something your firm should be thinking about continually. In fact, not planning for your peer review is planning to fail. Waiting to schedule your peer review can create a daunting situation that can be a both tedious and time consuming. Peer reviews ensure a firm’s commitment to quality in the accounting profession. Managing the peer review for your firm can be a rewarding task that establishes confidence of the quality of work you provide.
Selecting a Quality Reviewer
Selecting a peer reviewer is like finding a top-quality employee. It takes time and extensive consideration. In finding the right peer reviewer, a firm should look for a reviewer who has skills in accounting, auditing and quality control matters, experience in peer reviews, a solid knowledge of the peer review program, and a strong belief in improving firm quality.
Here are some factors to consider when hiring a peer reviewer:
- Make sure the reviewer is a peer. Do they come from a firm that is similar in size to yours? Do they practice in similar industries?
- Consider time and cost of the peer review. Is the reviewer and their team available to provide the peer review services when your review needs to be performed? Will you have extra time before the due date should there be any delays? What is the size of the firm and what are their hourly rates? What factors can vary the price? How far is the reviewer willing to travel? How many members are part of the review team?
- Evaluate competency. This is extremely important in getting a quality peer review. The search engines provided by the AICPA and NJCPA help to narrow down the list based on the industry and competencies needed. When you are interviewing the potential peer review candidate, ask questions regarding their education, firm affiliations and AICPA Quality Centers they are members of. Ask them to share their firm’s latest evaluation of peer review.
- Ask for references. You should feel confident you have a good understanding of the reviewer’s background. This will prove to be necessary in achieving a quality peer review.
Directories of peer reviewers are available on both the AICPA and NJCPA websites, and the AICPA has a guide to help in the selection process.
Peer review is something that needs to be continuously planned for. Implementing daily processes and procedures that your firm’s leadership and associates can follow greatly increases your chances of a successful peer review.
Our firm has implemented some best practices to be sure we continually strive for quality engagements. For example, we have a checklist of work product that is required at varying levels of attest and certain nonattest engagements. This ensures that all financial statements, compilations, reviews and audits include the work performed as required under the professional standards. Before any financial statement is delivered to a client, an individual in the firm checks a few key areas for quality. They also collect any information we may need for the peer review engagement list, such as industry, report and release dates. This process ensures our electronic binders are complete and allows us to close them down in a timely basis. These efficiencies help us provide quality engagement services to our clients while at the same time preparing us for peer review and the in-house monitoring required in years between.
Striving for quality all year long, starting early in your peer review selection and using the AICPA and NJCPA tools will go a long way in getting a “PASS” grade on your next peer review.
Judith L. Tutela
Judith L. Tutela, CPA, RMA, PSA, CMFO, is principal with the Spire Group, P.C., specializing in government accounting and audit services. She is a member of the NJCPA Nonprofit and Governmental Accounting & Auditing interest groups.
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