State Board Report

May 2010

Overriding the veto of Governor Linda Lingle, the Hawaii legislature on April 30 passed a mandatory peer review law which requires “a peer review every three years on the firm’s Hawaii attest work” for “every firm, including the Hawaii offices and Hawaii engagements of foreign or multistate firms.” Although the law makes clear that should the review disclose information that a firm “has not met the appropriate professional standards, the board may require further investigation of the firm,” it states that the peer review process “shall be for educational or remedial and not punitive purposes.”

The new law also states that the Accountancy Board may authorize a third party entity to administer the mandatory peer review “provided that the entity shall not require firms or the firms’ owners or employees to become members of the entity to participate in peer review and shall charge the same rate for peer review services to both members and nonmembers.”

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