Clarified peer review standards approved by Peer Review Board

By Ken Tysiac

CPA firms and peer reviewers will work under guidance that's designed to be clearer beginning later this year after the AICPA Peer Review Board (PRB) on Wednesday approved Clarified AICPA Standards for Performing and Reporting on Peer Reviews.

The PRB believes the clarified standards will make peer review guidance easier to read, understand, and apply while not substantially changing what already is required by the existing standards. The final standards will be published in the April update to the Peer Review Program Manual and also will be made available on the AICPA Peer Review website around the same time.

The clarified standards are effective for peer reviews commencing on or after May 1, 2022, and early implementation is not permitted. The changes that will be reflected in the final standards include:

  • The majority of procedures in a system review will not be required to be performed at the reviewed firm's office. Instead, the extent of procedures will be determined by assessing peer review risk.
  • The number of office visits on system reviews also will be determined by assessing peer review risk.
  • A surprise engagement selection will not be required but still may be selected based on assessment of peer review risk.
  • The term "significant deficiencies" will be eliminated in fail reports on engagement reviews because it created confusion. In existing guidance, the term didn't indicate severity but rather was used to show that a deficiency was present on all engagements reviewed. Under the clarified guidance, fail reports on engagement reviews will identify only "deficiencies."
  • While not required by the clarified standards, administering entities may adopt policies to include peer review documents for single audit engagements in materials for their Report Acceptance Body meetings.
  • Guidance for performing and reporting on quality control materials reviews will no longer be included. Instead, quality control materials providers may choose to have an examination of the materials conducted in accordance with the attestation standards established by the AICPA.

More information on this topic can be reviewed in a draft of the clarified standards contained in the PRB's February open session materials and in the exposure draft issued on Sept. 15, 2021.

— To comment on this article or to suggest an idea for another article, contact Ken Tysiac at

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