Changes Would Facilitate State Board Access in
States with Mandatory Peer Review

The AICPA Peer Review Board (Board) released an exposure draft on April 16, 2007 containing proposed revisions to the AICPA Standards for Performing and Reporting on Peer Reviews and Interpretations to the Standards. The exposure draft is available on the AICPA Peer Review Program and Center for Public Company Audit Firms PRP’s web sites.

Under the proposal, one set of Standards and Interpretations would be created within the AICPA Peer Review Program for all AICPA members subject to peer review. Other proposals include a reengineered reporting process, changes to engagement and report reviews, and more principles-based Standards.

One of the key changes would facilitate state board of accountancy access to peer review results. AICPA President and CEO Barry Melancon explained how this would work at the Members Advisory Forum on May 9, 2007 in Lansing.

Melancon said in the states with mandated peer review (39 states, including Michigan), the state societies would advise firms that peer review results would be posted on a secure state board access-only web site unless the firm opts out. Firms would receive a confirmation upon posting. Firms also could request peer review results be made available to other state boards.

The proposed changes are expected to result in a more efficient and effective peer review process. However, since the proposed changes are significant, all interested parties (especially peer reviewers, peer reviewed firms and peer review users) are encouraged to review them and provide feedback to ensure your views are considered. The comment deadline is June 30, 2007. The exposure draft contemplates that the revised Standards and Interpretations will be effective for peer reviews commencing on or after January 1, 2009.

Many factors have influenced the current reevaluation of the Standards and Interpretations, most notably feedback received from peer review users, including feedback received from an on-line poll of AICPA members. The feedback was considered by an AICPA Board of Directors task force established in May 2005, which issued a report of recommendations to enhance the Program in February 2006. That report of recommendations was considered by a Joint Peer Review Task Force and the Board’s Standards Task Force, which have been addressing harmonization issues and other program enhancements since 2004.
The most significant conclusions from the work of the Board of Directors and Joint Peer Review task forces are the recommendations to:

• Merge the AICPA’s two peer review programs (AICPA and CPCAF PRPs), and
• Reengineer the reporting process to be more understandable and usable in light of the growing mandate that the results of peer reviews be made more widely available.

To further these recommendations, the exposure draft proposes to create one set of Standards and Interpretations within the Program for all AICPA members subject to peer review. This includes those members’ firms currently enrolled in the CPCAF Peer Review Program. Other proposals include a reengineered reporting process, changes to engagement and report reviews, and more principles-based Standards.

We strongly encourage you to review the exposure draft and provide your feedback so your comments and ideas are heard. The comment deadline is June 30, 2007.

Because the MACPA is interested in member concerns, we would like to be made aware of your perceptions and recommendations. When responding to the AICPA, please copy the MACPA Peer Review Department at peerreview@michcpa.org to help us support our members' interests.

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