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6 ways to improve the peer review experience
A survey of seasoned peer reviewers identifies ways reviewers and the firms being reviewed can change for the better.

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Peer reviews cost firms time and effort, and some accountants believe the process is focused on finding mistakes, but the purpose of peer reviews is to enhance engagement quality. Peer reviews can also improve firms’ efficiency by, for example, reducing excessive testing in low-risk areas, improving the use of technology tools, and identifying better documentation strategies, a survey of seasoned peer reviewers suggests.
Done right, the benefits exceed the costs of peer reviews, according to the survey.
The AICPA Peer Review Program aims to support the performance of high-quality accounting, auditing, and attestation services by CPAs in public practice. The cornerstone of the program is an assessment by an independent peer reviewer of a firm’s system of quality control, also known as a system review, or the engagements performed by the firm’s personnel, also known as an engagement review.
This assessment ultimately leads to a report being issued that indicates whether the reviewed firm passed, passed with deficiencies, or failed its peer review. But a peer review also has the potential to offer benefits to the reviewed firm as well as the peer reviewer. In serving the public interest and firms alike, peer review is both educational and remedial in its nature.
In collaboration with the staff overseeing the AICPA Peer Review Program and the Peer Review Board, the AICPA Auditing Standards Board (ASB) surveyed peer reviewers who perform system reviews about topics of mutual interest, including ways to improve the peer review experience. The most recent survey was completed by 163 peer reviewers in summer 2023. Those who completed the survey had an average of 17 years of peer review experience and 32 years of public accounting experience, and they had completed an average of 13 system peer reviews over the past three years.
RECOMMENDATIONS FOR REVIEWED FIRMS AND PROFESSIONALS
Overall, peer reviewers shared the view that the benefits of a peer review exceed its cost and that peer reviews often identify opportunities to improve engagement quality that are shared with peer review clients.
Because so much of the success of a peer review depends upon the reviewed firm and its professionals, the survey asked peer reviewers to describe actions that firms can take to improve the peer review experience. The reviewers offered various recommendations that related to three primary areas: preparation and organization, open and clear communication, and embracing the spirit of peer review.
Preparation and organization
Peer reviewers recommend firms devote sufficient time and efforts to preparing for their peer review. That includes having requested documentation, such as the engagement profile, and other information accurately prepared and well organized for the reviewer. Also, firms should ensure that necessary personnel are available to respond to reviewers’ questions in a timely manner and that logistics are in place for the review, such as arranging IT support ahead of the peer review team’s arrival.
One peer reviewer recommended firms “have all engagements ready for review on the fieldwork dates. Complete our information request list prior to fieldwork starting. Be ready and available to respond to engagement findings during fieldwork.”
In short, peer reviewed firms should be prepared and organized for their peer review the same way they expect their audit and attestation clients to be prepared when the firm delivers such services.
Open and clear communication
Peer reviewers also commented on the value of firm professionals being open and candid in all communications with their reviewer. Several survey participants recommend to peer review clients that they stay in touch after their review is finished to ask questions of their peer reviewer and discuss any concerns as they arise, so more informed decisions can be made and quality can be “built” into the firm’s engagements. One peer reviewer suggests that firms “keep in touch — let us know what changes are occurring in the firm and what challenges they are facing.”
Those surveyed urge firm personnel to remain open to their reviewer’s comments and recommendations. One peer reviewer says firms should “have an open mind and realize that, as a peer reviewer, we are just there to help them improve. We aren’t there to just find something wrong.”
Peer reviewers encourage firms to be patient with them and recognize that while firm personnel work with their files every day, the peer reviewer does not. Consequently, the reviewer may ask questions that are already answered in the engagement documentation. Nonetheless, several peer reviewers recommend that firm personnel respectfully challenge the peer review team if they disagree with them. Reviewers understand that they may have overlooked something in the documentation, and some suggest that a firm should “feel free to consult with someone outside the firm if you do not agree with the reviewer’s findings.”
Embrace the spirit of the peer review
In describing the objectives of a system review, PR-C Section 210, General Principles and Responsibilities for Reviewers — System Reviews, states that a reviewer is expected to “obtain reasonable assurance that the reviewed firm’s system of quality control for its accounting and auditing practice has been designed and complied with to provide the firm with reasonable assurance of performing or reporting in conformity with the requirements of applicable professional standards in all material respects.”
A common observation among peer reviewers is that the peer review process is misunderstood as being punitive and intended to “catch” firms. While a carefully performed peer review may identify matters of concern that require attention or corrective action, reviewers recommend firms take time to understand the peer review process and embrace the “enhancing quality” nature of peer review.
Learning more about the peer review process can alleviate any lingering concerns. With this in mind, peer reviewers suggest that firm personnel familiarize themselves with peer review checklists and practice aids along with the various resources available on the AICPA Peer Review website.
Finally, peer reviewers encourage firm leaders to share peer review findings and recommendations with all professional staff. Doing so allows the firm to leverage issues raised during the peer review to train staff and foster a culture that is focused on continual improvement and improving quality. As one peer reviewer commented, “the most important thing is [that] the firm has [a] good tone at the top and wants to learn.”
RECOMMENDATIONS FOR PEER REVIEWERS
The survey also asked what actions peer reviewers can take to make the peer review experience more positive for firms. Again, the analysis revealed recommendations in three primary areas: effective communication and expectations setting, offering explanations and solutions, and sharing insights for future engagements.
Communicating effectively and setting expectations
Communication was highlighted in several of the peer reviewers’ recommendations. Suggestions in this area include meeting with appropriate firm personnel to discuss logistics and expectations of the review. This planning meeting may be most effective when done in person because of the benefits of face-to-face dialogue, but it can be done via phone or videoconference. Peer reviewers recommend discussing the review’s timeline (including the planned start and finish dates), arranging the appropriate level of access to the firm’s information system, providing a list of information and documentation necessary to complete the review, and answering any of the firm’s questions about how they should prepare for the review.
A related recommendation is to establish expectations that peer review is intended to be educational, to be helpful, and to improve engagement quality, not to be punitive. Finally, communicate with firm personnel throughout the entire review process. For example, share concerns about issues as they arise and listen to firm personnel. What appears to be a matter of concern may in fact be a lack of clarity in the documentation.
Offering explanations and solutions
Peer reviewers recommend explaining the “why” behind peer review comments so that firm personnel better understand the nature of the reviewer’s concerns and the potential cause so corrective action can be taken in the future. A related recommendation is to offer potential solutions on how to fix identified problems and deficiencies. Several peer reviewers suggest providing examples of correct financial statement disclosures and engagement documentation as a means of helping a firm’s professionals learn and improve engagement quality.
Devoting ample time to answer questions from firm personnel during the exit conference was the final recommendation in this area. While there may be a desire to wrap up the peer review, reviewers recognize the importance of taking time to ensure that firm personnel have a thorough understanding of the issues identified during the review, how they might have occurred, and potential corrective steps.
Sharing insights for future engagements
Peer reviewers noted that firms benefit when a reviewer shares insights that have the potential to positively impact future engagements. Because peer reviewers frequently gain perspective on the inner workings of how different firms operate, they are in a unique position to identify opportunities for efficiencies and improvements that can be shared with other firms.
Indeed, two common recommendations from peer reviewers are to suggest ways to be more efficient and improve firm processes and to share specific best practices with the caveat of protecting the confidentiality of the parties involved. (See the sidebar, “Top Efficiency Gains Identified by Peer Reviewers.”) For example, one peer reviewer provides internally developed spreadsheets as a means of helping other firms improve their audits while also gaining efficiencies. Another reviewer said that peer review clients are particularly appreciative of advice related to software and information technology (IT) to use within the firm and on engagements. As one reviewer noted, it is useful to “be in the mindset of helping firms rather than just looking for matters/findings.”
Another recommendation from peer reviewers is to discuss new and upcoming accounting pronouncements and professional auditing, quality control, and attestation standards. Being proactive in this way helps firms stay informed about new or changing requirements, such as those related to the quality control standards. Finding out early about new accounting rules gives professionals adequate time to update their knowledge through continuing education courses, self-study courses, or other means and to make any necessary changes to their firm’s policies and practices.
Finally, reviewers also suggest sharing examples of documentation for new pronouncements and standards as an effective means of fostering quality. This suggestion underscores the important role that peer review plays in educating practitioners and supporting the provision of high-quality accounting, auditing, and attestation services.
Top efficiency gains identified by peer reviewers
Participants in the peer review survey conducted by the AICPA Auditing Standards Board indicated that peer reviews prompted review firms to make a number of improvements, including:
- Improved use of software and information technology, including going paperless;
- More efficient documentation practices;
- Reduced unnecessary testing in lower-risk audit areas;
- Improved use of practice aids;
- Improved risk assessment practices; and
- Improved audit sampling.
About the author
J. Gregory Jenkins, CPA, Ph.D., is the Ingwersen Professor of Accounting in the Harbert College of Business at Auburn University in Auburn, Ala., and is a member of the AICPA Auditing Standards Board.
LEARNING RESOURCES
Are You Ready for Your Peer Review?
Are you preparing for your next peer review? Join us as we walk through the peer review process, review the necessary elements of quality control, and offer tips to help enhance the quality of your peer review.
Oct. 22, 1 p.m. ET
WEBCAST
Produced from the 2023 Peer Review Conference Breakout Session for Committee Members, this course covers topics related to the roles and responsibilities of Report Acceptance Body members.
CPE SELF-STUDY
Recent changes to standards and guidance related to the Peer Review Program are reviewed using information from the 2023 Peer Review Conference.
CPE SELF-STUDY
For more information or to make a purchase, go to aicpa-cima.com/cpe-learning or call 888-777-7077.
AICPA & CIMA RESOURCES
Articles
“QM Is Approaching Faster Than You Think — Get Ready,” JofA, Nov. 1, 2023
“QM Standards: Overview of the Monitoring and Remediation Process,” JofA, Sept. 28, 2023
“Clarified Peer Review Standards Approved by Peer Review Board,” JofA, Feb. 4, 2022
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