The part-time technical reviewer.

WHAT THE FIRM WANTEDTHE PARTNER'S VIEWPOINT

Our 14-person firm joined the American Institute of CPAS private companies practice section (PCPS) in 1986. As we prepared for our first peer review, it became clear we needed someone to act as technical reviewer. We thought this would be a regular staff member who also would be responsible for quality control.

After going that route and, in fact, passing our peer review using this arrangement, we decided the technical reviewer's role was too substantial to be just one of many responsibilities of a staff accountant. We came to this conclusion for several reasons. First, the time required to maintain technical expertise in accounting and auditing areas is significant. To ask a staff accountant to devote hours to this responsibility as well as maintain basic knowledge in other areas while learning new tasks would leave the accountant with only minimal billable hours.

We also believed it was important the technical reviewer be independent of other staff members. One of the technical reviewer's main functions is to critique other staff members' work. Without independence, this critical stance would be difficult to maintain. In addition, there was no one to perform technical reviews on the reviewer's work.

Finally, we wanted our technical reviewer to be able to educate our staff in all facets of accounting and auditing, ranging from workpaper preparation techniques through the application of the appropriate statements on auditing standards, Financial Accounting Standards Board statements and statements on standards for accounting and review services. We thus concluded we needed a staff member whose sole function was that of technical reviewer.

We realized, however, that this position would not be full-time at our firm. We also recognized that it would take a special type of person to accept a job with such an apparently limited scope. The fact that we wanted the position filled by an employee rather than an independent contractor further limited the choices we would have.

We called on an employment agency to help us in our search and the agency recommended a professor seeking part-time employment. We realized that hiring an academic for the position was a natural fit. Technical knowledge, constant exposure to current accounting theory, flexible working hours and appropriate educational abilities all proved to be the qualities we needed.

We have been happy with our decision to use a professor as our part time technical reviewer. We pay him a staff accountant's hourly rate, so the expense is no greater than when we were using a staff person for the job. As a firm, we have maintained a high standard of technical competence and made good use of his research and teaching abilities. My partners and I have been able to cut back on our review time and yet remain comfortable with firm quality and consistency. Our internal quality control system is working.

HOW IT WORKS-THE PROFESSOR'S PERSPECTIVE

When I was hired by the firm, I was told my main function was to enhance quality control by ensuring firm procedures equaled or exceeded professional standards. I was assigned these duties:

* Review. I review all accounting and auditing engagements, including workpapers, various checklists and programs, letters to and from clients (such as the engagement letter, representation letters, etc.), financial statements and the accountant's or auditor's report as well as some tax returns. The in-charge accountant gives me all such work when it is finished. If the work is satisfactory, I sign off a reviewer's checklist and forward the file to the engagement partner for final review. If I have any comments on the work, it goes back to the in-charge for consideration or correction.

My work is done before the engagement partner's review (after any in-charge review); consequently, all of the firm's work, whether compilation, review or audit, receives at least two inspections.

* Inspection and peer review. As a PCPS member, the firm must undergo an annual in-house evaluation of its quality control system as well as an outside peer review every three years. I am a member of the firm's quality control team and perform the inspection function for the annual evaluation. I also coordinate and assist in the peer review.

* Research. I do any research requested by partners or in-charge accountants (the firm's tax department performs tax research).

* Training. One of my responsibilities is to oversee professional staff training. Staff members receive most of their training from Michigan Association of CPAS or AICPA seminars. The firm also offers in-house training in biweekly morning meetings from May through December. Topics include everything from technical updates to insights into different practice areas. The staff conducts some meetings, which gives them additional training in researching and experience in offering technical presentations.

I also keep staff up-to-date on new technical pronouncements through memos or the biweekly meetings. On-the-job staff training is accomplished in part through my technical reviews.

On arrival at the firm, I have upgraded and maintained the firm's technical accounting and auditing library.

* Recommendations and feedback. My position also calls for me to comment on staff development and on programs and checklists used on various accounting and auditing engagements. I may offer other suggestions to enhance quality control or efficiency.

The person chosen as technical reviewer for a firm should have a strong background in public accounting as well as interest and experience in research and training. I worked as a senior accountant for what was then Haskins & Sells and as a supervisor for Coopers & Lybrand. I have a BBA and an MBA from the University of Detroit.

BENEFITS FOR BOTH SIDES

My duties as a technical reviewer take approximately 20 hours per week, which is about what most professors spend on academic research. The firm allows me flexible hours so I am able to work with other firm members when necessary and yet there is no conflict with my teaching or faculty schedule.

The firm pays for my attendance at seminars and conventions as well as my professional dues. I remain current on accounting and auditing pronouncements, which benefits the firm and my students at the University of Detroit/Mercy. I'm also able to do academic and professional research using the firm's library and periodicals. My job as technical reviewer has added to my experience as well as benefited my students and the firm.