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Task force releases recommendations for enhancing peer review transparency.

At a meeting of the AICPA Board of Directors last month, an AICPA special task force released a set of recommendations to enhance the transparency of the Institute's Peer Review Program. The task force addressed the input of users and CPAs on how to best improve the peer review process.

Recognizing the increased demand for peer review information by regulators and other users, for instance, the task force recommended that the peer review reports of firms that have received a second consecutive modified and any adverse peer review report should be provided to state accountancy boards.

Other key task force recommendations include:

* Peer review reports should be as concise as possible and written in "plain English." The "grading" terminology should be simplified and the report should be a stand-alone document that discloses significant matters affecting the type of report issued.

* The current oversight processes should be made more transparent by communicating the objectives, procedures and results of oversight to the public through annual reports.

* All state boards should require peer review as a condition of licensure.

* The AICPA should conduct a comprehensive peer reviewer recruitment campaign to attract new, quality peer reviewers and educate firms on the benefits of having their owners and staff members involved in performing peer reviews.

* The AICPA's Peer Review Board should continue to ensure the high quality of peer reviewers, and consider additional minimum criteria to be a peer reviewer.

* The AICPA should provide a mechanism for members to comply with state board licensing requirements by allowing any AICPA firm to post its peer review results in the AICPA's current public file regardless of membership in a specific AICPA section or audit quality center.

The recommendations (see full report at www.aicpa.org/transparency/index.htm) are being submitted to the Peer Review Board for consideration, analysis and possible execution.

The board decided that if the recommendations are successfully implemented, a broad-based campaign to educate members and users about the significant changes would be warranted. In addition, the AICPA Board of Directors decided to bring the recommendation related to sending adverse, second consecutive modified reports to state boards to Council this month for discussion and consideration as a future membership ballot.

Fully 41 state CPA societies now administer the AICPA Peer Review Program and the AICPA Peer Review Board oversees the 41 administering bodies. Thirty-nine states require peer review as a condition of licensure. Thousands of AICPA firms currently place the results of their peer reviews in a public file as an enrollment requirement in the Center for Public Company Audit Firms peer review program or as a membership requirement of AICPA audit quality centers and the Private Companies Practice Section. In addition, thousands of firms notify the public of the results of their peer review due to governmental or regulatory requirements.
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Publication:CPA Letter
Date:Mar 1, 2006
Words:467
Previous Article:Public meeting notices.
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