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State Board Report

October

The American Institute of CPAs released its final plan on the “Evolution of Peer Review Administration” on August 31. The plan is based on an original proposal for reorganization of the peer review program’s administration distributed in February 2016 and then a subsequent paper sent to the State Boards of Accountancy in July 2016, which was then revised in a second paper sent out in January 2017. The paper proposed benchmarks for peer review administrators, technical reviewers and peer review committees/report acceptance bodies. Twenty-six Boards of Accountancy had responded to the AICPA’s peer review reorganization proposal by the June 30, 2017 comment deadline. According to the AICPA, “Feedback on the revised proposal supported the benchmarks approach to evolving administration.”

“The benchmarks approach remains the primary focus of the final plan, with some minor revisions based on questions and comments received. Some benchmarks may require changes to current guidance. The AICPA Peer Review Board will consider and formalize the plan’s current and implied benchmarks and corresponding guidance at its meeting on February 2, 2018,” the AICPA announced.

One of the points that had been raised by several Boards in their comment letters was whether it was really necessary to have a CPA on the staff of the administering entity. According to the AICPA: “After extensive discussion and deliberation with state society stakeholders, the AICPA believes it is essential to have an actively engaged CPA on staff to lead the administration of the Program. At the same time, the AICPA recognizes this may be a significant change for some, and has included in the plan an option to delay compliance with the requirement for up to three years to allow time for the transition.”

During NASBA’s June Regional Meetings, several Accountancy Boards questioned if they would be consulted should there be a change in the administering entity for their program. In announcing the final plan, the AICPA said that the administering entities “are expected to proactively communicate” with the Boards. The AICPA is meeting with a panel of State Board executive directors on November 1, 2017, and the AICPA Peer Review Board will meet with the NASBA Compliance Assurance Committee on November 20, 2017.

Compliance Assurance Committee Chair John F. Dailey, Jr., will outline the details of the AICPA’s final proposal at NASBA’s 2017 Annual Meeting.