Important Preliminary Knowledge
To understand what a PICPA Peer Review is, you’ll need some background information about two professional organizations in the accounting industry:
- The American Institute of Certified Public Accountants (AICPA) was founded in 1887 and is a national professional organization of Certified Public Accountants (CPAs) in the U.S. This organization sets ethical and auditing standards for CPAs and CPA firms in the United States.
- The Pennsylvania Institute of Certified Public Accountants or PICPA was founded in 1897, and is the second-oldest CPA organization in the United States.
AICPA Peer Reviews
The AICPA Peer Review Program (PRP) was created by the AICPA to encourage excellence in auditing and accounting services while helping to ensure public trust. AICPA Peer Reviews are outside evaluations of a CPA firms’ business practices. These evaluations are required in 55 jurisdictions, and are necessary for obtaining AICPA membership. Firms that are located in one of the 55 jurisdictions are expected to undergo a peer review every three years. As of January 2018, over 27,000 different firms were enrolled in the AICPA PRP. In Pennsylvania, Delaware, New York, and the U.S. Virgin Islands, AICPA Peer Reviews are administered by the Pennsylvania Institute of Certified Public Accountants or PICPA and are known as PICPA Peer Reviews. All of these evaluations are performed in accordance with AICPA Standards for Performing and Reporting on Peer Reviews.
PICPA Peer Reviews
After a CPA firm enrolls in the peer review program, it can expect its first review within 18 months of the enrollment date. There are two different types of peer reviews—System Reviews and Engagement Reviews. System Reviews take a close look at the firm’s quality control system. Engagement Reviews look at the actual work that is performed. While the details of a peer review are kept confidential, the name and address of the firm as well as some other details about when the evaluation took place are available to the public. There is an 8-hour course that prepares firms for the program. The course teaches firms how to prevent some common problems that are encountered during the evaluation. It also involves a complete review of the firm’s overall system as well as their quality control. One major aspect of the AICPA’s PRP involves creating an environment that puts a lot of emphasis on quality control monitoring as a means of constant improvement. The cost of a PICPA Peer Review depends on the size of the firm as well as the region. The number of partners and offices of the firm, as well as the nature of their accounting practice, also comes into play. There are a number of indirect expenses associated with preparing for a review. These expenses should be minimal for firms that have a suitable accounting and auditing practice. There are three different peer review results that a firm can get: Pass, Pass with Deficiencies, and Fail. A “pass” result indicates that the firm’s accounting and auditing practices are suitable and there aren’t any issues. If a firm gets a “pass with deficiencies” result, it means they have passed the peer review, but there are things that need to be improved. Receiving a “fail” result means that the firm did not pass the peer review due to significant problems with their quality control system.
Benefits Of PICPA Peer Reviews
There are many benefits of PICPA Peer Reviews to both firms and their clients. This program helps firms run more efficiently while also ensuring that their internal processes are following best practices. Clients can feel secure doing business with firms that have successfully passed their PICPA Peer Reviews.
Accounting and Business Consultant’s LLC’s Peer Reviews
Our firm’s system of quality control for its accounting and auditing practice is subject to external peer review triennially. In September 2016, McKonly & Asbury, LLP issued a report with a peer review rating of pass on its external peer review of Accounting and Business Consultants, LLC for the year ended March 31, 2016. This peer review report, and the PICPA’s acceptance letter of our peer review, are available below.
In December 2013, McKonly & Asbury, LLP issued a report with a peer review rating of pass on its external peer review of Accounting and Business Consultants, LLC for the year ended March 31, 2013. This peer review report, and the PICPA’s acceptance letter of our peer review, are also available below.
Accounting and Business Consultants, LLC is a specialty CPA and consulting firm with expertise in documenting and auditing cybersecurity risk management programs for businesses like yours. We will help you document your entity’s cybersecurity risk management program and design effective controls.
We can also help you plan and perform a cybersecurity audit to meet your reporting needs.
Contact us to discuss the costs and benefits of financial, cybersecurity, SOC 1, SOC 2 and SOC 3 audits, or to learn more about our full suite of accounting, auditing and consulting services.