State Board Report
Compliance Assurance Committee Chair Janice Gray (OK) reported to the NASBA Board of Directors that the July 10, 2015 PROC (Practice Review Oversight Committee) Summit in Nashville had the largest attendance in the event’s history, with 30 states participating either through a representative of a Board of Accountancy or the State Society, and a total of 90 attendees. She noted that participants raised over 35 questions for the meeting’s speakers to address.
AICPA Vice President Jim Brackens underscored actions to enhance the AICPA’s Peer Reviewer quality that will be effective as of December 31, 2015: The reviewer must be practicing public accounting in the last five years; The reviewer must have experience at the level of the engagement he or she is reviewing; The reviewer must be currently involved in his or her own firm in the types of engagement he or she is reviewing; Their firm must also be associated with the Audit Quality Center if one exists for that practice area; and The reviewer must maintain certain levels of performance.
Mr. Brackens also told the PROC Summit that the AICPA Peer Review Board is considering: strengthening the Peer Review’s approach to evaluating the design of a firm’s quality control system; enhancing requirements for corrective action when a peer reviewer detects certain non-conforming engagements; and streamlining the removal of firms from the Peer Review program should they fail to properly complete required corrective actions.
NASBA Director-at-Large Richard N. Reisig (MT) discussed how the State Board’s Peer Review Oversight Committee can work more effectively utilizing the Facilitated State Board Access program. Mr. Reisig encouraged the State Boards to be "nimble enough to revise what we have," to take advantage of the improvements AICPA is making in the Peer Review Program. He observed some peer reviewers are feeling unappreciated and are getting out of performing reviews. While the loss of some reviewers would not be a bad thing, Mr. Reisig said, "We are asking them to do this job for us. We need to have them have faith in the system." He proposed each State Board consider holding a forum with their peer reviewers to let them know they are appreciated and what the Board needs them to do.
Through the AICPA’s Facilitated State Board Access program, Boards can obtain the current and prior copies of a firm’s system or engagement peer review report, Ms. Gray explained. They can also run other reports including: enrolled firm report; firms expanding access report; accepted reviews report; pass with deficiencies or fail report; firms by report grade; and dropped and terminated firms report. Additional information about the FSBA can be obtained on the AICPA website.
Colonel Francis X. Ryan’s presentation on "Peer Review Oversight: The Final Line of Defense in Protecting the Public" did an excellent job of shining a light on the significance of being on a not-for-profit board, Ms. Gray reported to the NASBA Board. She observed that 22 State Boards now have PROCs, but all jurisdictions should have one.
"There are so many differences among the states and the way their PROCs work," Ms. Gray told the NASBA Board. "I firmly believe in the PROC concept if the PROC can provide information for the State Board to follow up with remediation if necessary."
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