Your Peer Review Has Been Extended - Now What?
The AICPA Peer Review Board (PRB) has granted CPA firms with original due dates between Jan. 1 and Sept. 30 a six-month peer review deadline delay option to provide them with relief during the coronavirus pandemic. If your firm was the beneficiary of this extension, you should have received an email from the AICPA Peer Review Program. Be aware, though, that the delay is not a license to ignore peer review responsibilities.
Although the AICPA is encouraging firms to take advantage of the extra time if they need it, firms that don’t need it may be better off staying on schedule.
The PRB and the AICPA Peer Review Program staff will continue monitoring the pandemic throughout the summer and will evaluate whether additional automatic extensions are appropriate for firms with due dates after Sept. 30.
Even firms that do plan to take advantage of the delay are being encouraged by the AICPA to contact their peer reviewers as soon as possible to schedule a mutually convenient time for their reviews.
TSCPA recommends that if your firm’s review was extended and your peer reviewer hasn’t already reached out, you should contact your peer reviewer as soon as possible.
Reviewers’ firms also will be affected by the pandemic, so it’s important to get on their schedule in a timely fashion. Richard Hill, CPA, CGMA, a peer reviewer and managing partner with Mitchell Emert & Hill, P.C. in Knoxville, said he is hoping the firms he reviews will stick to their regular time frames.
His firm is trying to stay ahead of schedule on all its work out of concern that a second wave of the pandemic later this year could cause more disruption.
“We’ve kind of fallen into a schedule,” Hill said. “And I know that my peer reviews complement the rest of my practice. If either part of that gets out of balance, we’re not going to stay current.”
Firms that have received an extension still need to submit information required to schedule their review. This is done by completing the firm’s Peer Review Information (PRI) form, which can be accessed in PRIMA’s “Action Items” section. Firms are encouraged to do this as soon as possible.
Firms that received an extension or outstanding remedial actions from their most recent peer review are strongly encouraged to complete them as soon as possible as well.
The Tennessee State Board of Accountancy requires notice of extensions granted by the PRB.
To allow the state board access to this information, your firm can opt in to Facilitated State Board Access (FSBA) in PRIMA and opt in to share additional peer review information either during or after completing your PRI form. The board can immediately access the extension letter, so there will be no need for you to email or mail a copy.
Firms that perform audits under governmental auditing standards (Yellow Book) will not need to take any further action with the U.S. Government Accountability Office (GAO). The GAO indicated earlier this year that it will provide automatic concurrence for any AICPA extensions, granted in 2020 because of the pandemic, extending beyond 90 days from the firm’s due date.
Peer Review Acceptance
Your firm should also consider the time needed by the TSCPA Peer Review Committee to accept your review. Reviews with extended due dates must be presented to the committee at the same time as reviews originally due at that time.
Your colleagues volunteer their time to serve on this committee and must balance their own firm/client commitments with their service to the profession. The granting of automatic extensions, though a welcome and needed relief for many firms, will result in significant resource constraints and impact the report acceptance process.
Accordingly, though every effort will be made to have your firm’s report accepted with the normal timeframe (120 days from receipt of workpapers from your reviewer), it may not be possible to do so. Particularly if you require your peer review report for engagement proposals or license renewals, please do all you can to have your review performed as soon as practicable.
Preparing for Reviews
Because of the pandemic, all or part of the reviews are likely to be held off-site this year. Although reviewers are not required to get prior approval from their peer review administering entity, they will need to determine whether they can effectively perform a firm’s review off-site.
An off-site review needs to be as effective as an on-site review, but it may not be as efficient, potentially leading to a higher cost. Firms can take the following actions to improve efficiency and hold down costs:
- Confirm that their peer review information in PRIMA accurately represents all engagements within the scope of their peer review that were performed during the peer review year.
- Block out time to ensure availability of pertinent staff during the review. In essence, pretend the peer reviewer is on-site conducting the review.
- Gain understanding of the technologies their peer reviewer will use, including portals to transmit files; teleconferencing platforms, such as Zoom; and collaboration software such as Microsoft Teams.
- Consider file security.
Questions about peer review can be emailed to Katie Cheek, Director of Member Services at TSCPA at email@example.com.