1. Preparing for Your Peer Review
December 2017

2. Peer Review Requirements
Membership requirements of the AICPA:
A firm’s initial peer review must be submitted no later than 18 months from the date enrolled, or should have enrolled in the peer review program
Once every three years thereafter
State Board of Accountancy Mandatory Requirements: NYS, NJ, CT

3. Peer Review Requirements
State Board of Accountancy Requirements
NYS – (Prior to October 23, 2017)
Firms, except for unincorporated sole proprietorships, performing attest services in NYS must enroll if the firm has three or more CPA and or Public Accountants, or
The firm, including unincorporated sole proprietorships, provides governmental attest services (attest services rendered for any NYS or municipal department, board, bureau, division commission, public authority etc. or other governmental or proprietary function for NYS)

4. Peer Review Requirements
State Board of Accountancy Requirements
NYS – Law Change (Effective October 23, 2017)
Any firm that begins providing attest services or otherwise becomes subject to mandatory participation in the peer review program shall:
Notify the NYS board of its change in status within 30 days and provide the department with evidence of enrollment in an acceptable peer review program
Have a peer review completed within 18 months of the date such services were first provided

5. Peer Review Requirements
State Board of Accountancy Requirements
NYS – Law Change (Effective October 23, 2017)
Timing:
If you were in the middle of an attest engagement when the law was signed, you have 30 days to notify the NYS board and to enroll in a peer review program
If you do not plan on performing attest services, your firm has no requirement to register for a peer review as there is no requirement to do so
If you issued your audit report on October 22, 2017, the day before the bill is signed, your are not subject by the revised peer review law
The trigger for your notification/peer review requirement is the date an attest engagement letter is signed

6. Types of Peer Reviews Two Types: Engagement Review –
Applies to firms that only perform services under SSARS or services under the SSAEs (reviews/AUPs) that do not require a system review. Does not apply to firms that perform audits (GAAS) or examinations (SSAEs)
Objective is to evaluate whether engagements submitted for review are performed and reported on in conformity with applicable professional standards in all material respects.

7. Types of Peer Reviews Two Types: System Review –
Applies to firms that perform audits (GAAS) (Yellow Book) (PCAOB not subject to permanent inspection), examinations (SSAE)
Objective is to determine whether the system of quality control for the accounting and auditing practice id designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards.

8. Administration Administering Entity Selecting an administering entity:
National Peer Review Committee – Must be the administering entity for peer reviews of firms that perform audits of broker-dealers or issuers
State administering entities

9. Timing
Peer reviews are due six months after a firm’s peer review year end (3 years and 6 months after the previous peer review).
Initial peer review is ordinarily due 18 months from the date the firm enrolled or should have enrolled in the program

10. The Information Request
System reviews:
Inventory of A & A engagements including:
Approximate hours
Level of Service
Industry
New or continuing client/level of service
Office and Engagement Partner
Relevant engagement files

11. The Information Request
Firm licenses and professional licenses
Are partners and the firm licensed in the required jurisdictions
Regulatory communications:
Licensing boards
AICPA or State Societies
PCAOB/SEC/FINRA etc.
DOL/GAO
Nature of changes to practice (mergers/acquisitions)

12. The Information Request
Independence affirmations
CPE records:
AICPA
State
Quality Centers
Yellow book
Internal monitoring reports & Consultation memorandums

13. Field Work
Peer review team performs reviews of the selected engagements
Selections will be a representative cross section of the practice covering:
Mandatory selections
Levels of service
Partners/Offices
Interview of selected firm personnel

14. Selecting a Peer Reviewer
Peer reviewer qualifications:
Industry experience – Does the peer reviewer possesses experience in the review firm’s industry practice areas?
Peer reviewer’s capacity – Can the firm perform a timely review? Does the peer review possess adequate resources?
Experience – How many peer reviews has the reviewer performed?
Independent

15. Mandatory Selections Mandatory Selections are: Employee Benefit Plans
Audits under Government Auditing Standards
Single Audit
FIDICA banks
Carrying Broker dealers, 1/1/18 all BD’s
SOC 1 , SOC 2 and SOC 3 reports

16. Oversight
The peer review process is subject to oversight by the administering entity, including:
The reviewed firm
The peer reviewer
Objective of oversights are to ensure compliance with the peer review standards
AICPA Enhanced Audit Quality Initiative

17. Quality Control Document
Requirements of a firm’s quality control system are provided for in:
AICPA Quality Control Standard No. 8
Firm’s MUST have a written quality control document
Peer Review form 4300 or 4400 is obsolete

18. Quality Control Document
Represents a firm’s policies and procedures, including the related forms, checklists etc.
The extent of the quality control document may vary depending on the size and structure of the firm
Firm’s should take care to avoid unnecessary policies and procedures that burden compliance

19. Quality Control Document
The quality control document will address the following five elements:
Leadership Responsibilities
Relevant Ethical Requirements
Acceptance and Continuance of Client Relationships and Specific Engagements
Human Resources
Engagement Performance
Monitoring

20. Questions
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21. Peer Review / Quality Control Services
Peer reviewer services
Peer review consulting services
Quality control consulting services:
Technical resource
CPE
Inspection/monitoring
Pre-issuance/Post-issuance reviews

22. Contact Information
Vincent Gaudiuso, CPA, MST
Phone: (212)
Michael Wolansky, CPA
Phone: (212)