Peer Review

Why should a client be concerned about the results of a firm’s peer review? It gives you, the client, an idea on how a firm’s manages its quality control in its accounting and auditing portion of the practice. If a firm is committed to quality, it will have a good (pass) peer review report. If they are having quality issues then their report will be a pass with deficiencies or fail. If the firm has deficiencies, at least you, the client, can question the firm on what they are doing to fix the quality issues that were raised by the peer reviewer. By requesting a peer review report from the firm you are doing business with or are considering doing business with, you can get an idea on how the firm handles its quality control.
Most states require firms to undergo peer review in order them to be licensed if the firm performs audits, reviews or compilations. This is part of self-regulation by the CPA profession. A firm undergoes a peer review every three years. A peer reviewer is specifically trained to perform peer reviews of other firms and must be a partner or manager with a minimum of five years experience.
If you have questions about how to use a firm’s peer review to make a firm choice, please let us know.  Baldwin CPAs, PLLC has two experienced reviewers that can help.
/posted by G. Alan Long, CPA, CITP