NASBA Compliance Assurance Committee
Facilitated State Board Access (FSBA) — A program to allow voluntary disclosure of peer review results via a secure state board limited access Web site. Initially termed the “opt-out” initiative.
AICPA Peer Review Board (PRB) – Twenty-member senior technical committee that administers and establishes standards and interpretations for performing and reporting on peer reviews. One appointment is dedicated for a regulator and two are state CPA society representatives. The PRB previously administered only the AICPA Peer Review Program that provides reviews for approximately 32,000 firms performing non-SEC accounting and auditing work. Currently, the PRB is also the administering body for the CPCAF Peer Review Program. Three task forces are established within the PRB:
• Standards Task Force – write Standards and Interpretations
• Education Task Force – provides reviewer and stakeholder education
• Oversight Task Force (OTF) – performs procedures to obtain reasonable assurance reviews are conducted in accordance with Standards and are consistently evaluated. Conducts over 20 visits each year to evaluate compliance of the Administering Entities & Peer Review Committees.
Center for Public Company Audit Firms (CPCAF) – Has a peer review program that reviews the accounting and audit work performed by member firms for their non-public clients. Many of the 900 member firms in the CPCAF are registered and have their public company work inspected by the PCAOB. Other member firms have voluntarily enrolled in this program. Peer review reports of CPCAF member firms are posted to a public file.
Administering Entity (AE) — Department of a state CPA society that performs the administration of a peer review program using dedicated staff, contracted technical reviewers, and volunteers that serve on the state Peer Review Committee and its Report Acceptance Body (RAB).
National Peer Review Committee (National PRC) – Fifteen-member body of volunteers that administers and oversights peer reviews performed of CPCAF member firms. (AICPA staff perform the actual procedures.) It also is the acceptance body of the CPCAF members peer review reports. It contains a subcommittee of three-four members that serve as an Oversight Task Force. The National PRC has also been called:
• CPCAF Peer Review Committee (PRC)
• National RAB (Report Acceptance Body)
Compliance Assurance Committee – CAC – NASBA committee created in 2005 and charged to:
Explore, develop, and implement opportunities for state boards to become involved in standard setting and oversight of mandatory compliance assurance review programs. Develop and implement a plan for a compliance assurance review program.
State Board Peer Review Oversight Committee – PROC – a/k/a Peer Review Oversight Committee or Peer Review Oversight Board or Compliance Assurance Oversight Committee (CAOC) – Agents of a State Board, typically three members, with access to a statistics and a sample of peer reviews. Attend Peer Review Committee sessions in an observer capacity. Report to their State Board of Accountancy.
Standards for Performing and Reporting on Peer Reviews (Standards)– Revised standards, effective 1/1/09. Principles based Standards. Convergence of standards for the two programs and new governance structure of the Peer Review Board.
These new Standards provide flowcharts which serve as an evaluation ladder for reviewers in reaching the conclusion of what grade to assign and what to report. This ladder includes the following terms that are used to identify and assign relative weight to instances of possible noncompliance with professional standards noted in the course of a peer review:
• Matters (some Matters are elevated to Findings, others are simply noted in practice aid communications to the firm)
• Findings (some Findings are elevated to Deficiencies or Significant Deficiencies, others are noted in practice aid communications to the firm)
• Deficiencies (communicated in the body of a Pass with Deficiencies peer review report)
• Significant Deficiencies (unless very isolated, will generally result in a grade of “Fail”)
Practice Aid – Documentation of Matters and/or Findings written by the peer reviewer that is
provided to firms but not considered part of the peer review report itself. These documents are termed Matters for Further Consideration (MFCs) or Findings for Further Consideration (FFCs).
Firms must acknowledge the information contained in the Practice Aid and the noted Findings may result in remedial action required of the firm.
Old vs. New Peer Review Reports (after 1/1/09)
Old Standards Unmodified – No LOC
Unmodified – w LOC
Modified – LOC
Pass(Matter – MFC)
Pass with Deficiency
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