Whether you’ve had a lot of experience with peer reviews or you’re new to the process, you want a “successful” result. But how do you define success?

To answer that question, think of how you would define a successful audit to your client. You will realize there are more than a few parallels between a client audit and your peer review. Peace of mind might be part of the definition. Constructive comments for improving operations or internal control might be another. A client’s consistent quality of accounting during the audit period certainly enters the equation, too. Finally, a well-prepared client allows you to be more efficient.

Whether or not you have had a peer review, there are a few keys to a successful outcome. The following tips may be a refresher to what you already know. Some tips improve engagement quality and lead to fewer peer review findings. Others tips can streamline the peer review. Almost all are simple to implement. Start now and your next peer review can be a success.

Year-Round Tips
Start with a good system. The strength of your quality control system directly relates to the success of your peer review. Do your policies and procedures still fit your firm? Does everyone in the firm know what they are? Your system does not have to be complex as long as it works.

Review the comments from your last peer review. Did you fix all the findings from your last peer review? Did you implement the recommendations? If you did, you might avoid repeat comments in your next review.

Monitor your quality control policies and procedures. Monitoring is required. You must also document your monitoring procedures. Your reviewer will ask you for this documentation. Make sure you complete it. Monitoring procedures can include inspections, pre-issuance reviews, post-issuance reviews and other procedures. Your reviewer can help you plan the best approach.

Stay focused. Remind everyone that quality is a year-round job. Clients recognize quality even if they do not understand its technical aspects. The right attitude goes a long way in preventing deficiencies.

Prepare early. If your next peer review is in 2007, most of the work you are doing now will be covered by the review. Make sure everyone knows your peer review timetable.

Keep current. Many peer review findings result from out-of-date knowledge. Become familiar with the key points of new standards. Read accounting and auditing guides that apply to your engagements to get new developments. Share summaries of recent standards with other firm members. This can reduce the risk of missing a new required procedure or disclosure.

Engagement Tips
Maintain a critical, objective attitude. This can be difficult with long-term clients. Remind staff about professional skepticism when necessary. This can reduce the risk of omitting a critical procedure.

Give your work programs a fresh look. Do they include all the procedures required by recent standards? Do they cover steps unique to the industry?

Use the right practice aids. Don’t try to make one size fit all. Engagements in specialized industries need specialized practice aids. One option is to subscribe to a service (paper or electronic) that provides these resources.

Document your procedures. You know what you did. Others might not. Keep a good trail of all your procedures – even if they seem obvious. Poor documentation is one of the most common areas of peer review findings.

Give yourself time. Allow enough time to perform the engagement. Don’t rush critical procedures.

Ask for help. Nobody knows it all. Call other practitioners, the AICPA Technical Hotline or the MACPA for assistance with technical questions. This can help you find the right solution and save time along the way.

Perform adequate review procedures. Set aside the completed report and financial statements for a day before reviewing them. Ask a second person to review your documents. A fresh look can usually spot things you missed.

Consider using disclosure checklists. Missing disclosures is another very common peer review finding. You can avoid some of these by using a current checklist. In addition, make sure others in the firm know how to complete it. Many comments stem from not comprehending a disclosure checklist question. Remind your staff to ask for help if they don’t understand a question.

Read your accountant reports carefully. It’s easy to skip over this step if your reports have not changed recently. Do the financial statement titles used in the report match the rest of the documents? Are the dates correct? Did you report on supplemental information? Monitor your pro forma reports on a regular basis to determine if they are current and correct.

Before Your Peer Review
Select a reviewer with good communication skills. Your peer reviewer is part teacher and part advisor. Open, clear communication is critical to learning and to improving the quality of your practice.

Be prepared. Think about how you want your clients to prepare for their audits, reviews or compilations. Peer reviews are the same. Have the necessary files ready. Make sure staff members are available to answer questions. This will improve the efficiency of the peer review.

During the Peer Review
Keep an open mind. Your peer reviewer is not there to show what he or she knows. They want to help you do your job better. Be receptive to different ideas or beneficial criticisms.

Ask questions. Every practice is different. Your reviewer may have ideas you have not thought of. Don’t be shy.

Help develop your own recommendations. If you have findings in your peer review, help your reviewer develop recommendations. You know your firm. You are the best one to know what will prevent things from going wrong.

Remember the purpose of peer review. Peer review is designed around a foundation of education and remedial, corrective actions. This permits firms to actively participate in strengthening the quality of their practices.

Quality is an expectation in today’s marketplace. Your objective is to create a system that helps you deliver consistent quality. A peer review can help you get there. After all, a successful peer review is one that helps you improve the quality of what you do.

About the Author
Duane Reyhl is a senior manager with Andrews Hooper & Pavlik P.L.C., Saginaw, Mich., and author of two AICPA courses on peer review: Advanced Training Course for Reviewers: Current Issues in Practice-Monitoring and Peer Review: Are You Ready? He is also a member of the MACPA Peer Review Task Force and teaches CPE courses for the MACPA.

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