State Board Report
The AICPA received 55 comments on their plans to evolve their Peer Review Program’s administration, many from the Boards of Accountancy, and those comments did have an impact, according to NASBA Compliance Assurance Committee Chair John F. Dailey, Jr. (NJ). Rather than using a consolidation model, that would have set as a goal a maximum number of administering entities (AEs), the plan released on August 31 is focused on AEs continuing to be in operation based on their consistently meeting benchmarks, which will include qualitative, objective and measurable criteria. Mr. Dailey reported to the Annual Meeting that the AICPA has stated the AEs’ performance on those benchmarks is to be transparent to the state society CEOs as well as the Boards of Accountancy.
The benchmarks will be subject to change and will be modified, as appropriate, to deal with issues such as changes in technology. It will be up to the AE to develop its own policies to address compliance with the benchmarks.
Most of the comments the AICPA received from the State Boards remarked on the increase in cost to reviewed firms that would be anticipated if the AE must have on staff full-time a CPA who is knowledgeable in the Peer Review Program’s standards and administrative requirements. Mr. Dailey pointed out that the AICPA feels a CPA on staff will provide skills, knowledge and ability that will enhance the AE’s performance. However, the AE can request a waiver for up to three years to meet this requirement. Waivers must be filed by April 1, 2018 with the AICPA, he reported. AICPA Vice President Jim Brackens said the waivers will be automatic the first year because the AICPA has not yet established the benchmarks. However, waivers will need to be applied for annually.
The AICPA has stated that they will administer the Peer Review Program if the AE leaves the program and no other AE steps up, but in such situations a qualified Peer Review Oversight Committee (PROC) would review the program. Mr. Dailey announced that NASBA’s Compliance Assurance Committee continues to work on a plan for providing more hands-on assistance to State Boards with the facilitation of PROCS for Boards that may not have one, or would like assistance with their existing PROC.
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