State Board Report
Oklahoma Board Executive Director Randy Ross, commenting at the Executive Directors’ Meeting on the AICPA’s January 2017 plans for administering its Peer Review Program, said: “The progress that has been made since last year is exceptional.” The comment deadline on the revised AICPA plan for administration has been extended until June 30, but the AICPA has already started to make changes to what it originally was considering in February 2016. “We recognize engagement with the State Boards is crucial,” Beth Thorensen, AICPA Director of Peer Review, said. “This proposal is to outline what the plan will look like.” She pointed out that while the original plan would have eliminated an administering entity (AE) if it did not handle a minimum number of peer reviews annually, the current plan does not set a minimum. Instead there will be benchmarks that the AEs will need to meet, with swift consequences resulting in remediation or removal if they do not. The benchmarks will be monitored closely and will be transparent, Ms. Thorensen said. Details of the monitoring process are to be fleshed out further as comments on the proposal are received, but she offered some examples of benchmarks being considered.
Some state CPA societies are talking about no longer being administering entities, reported Ms. Thorensen, and the AICPA will work collaboratively with them. However, the names of those societies have not been released. “We want everything in place by next year,” she said. The final plan is to be released on August 31, 2017.
The Boards’ basic concerns with the previous proposal were mapped out by NASBA Associate Director of Compliance Services Rebecca Gebhardt. Having reviewed the new proposal, questions still remain about how benchmark violations are defined, how transparency will occur, who would oversee a national AE and how the State Board would be involved in disqualifying and/or approving a new AE.
Ms. Gebhardt also noted that on April 17 the AICPA will be launching a new web-based tool, the Peer Review Integrated Management Application (PRIMA). The Facilitated State Board Access (FSBA) program is to be integrated into this new website that will be accessed via aicpa.org. The FSBA provides an avenue for State Boards to see firms’ peer review reports with the firms’ permission.
NASBA will issue a response to the AICPA’s proposal by the end of June. The NASBA Compliance Assurance Committee plans to begin working through the changes that will be needed to the Peer Review Oversight Committee’s procedures, based on the AICPA’s final plan for transition to the new process. All of the new AICPA criteria should be implemented by May 1, 2018.
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