Peer Review Resources
The Peer Review Program is an educational and remedial program designed to help you improve the quality of your accounting and auditing practice. TSCPA administers the peer review program in Tennessee according to the AICPA Standards for Performing and Reporting on Peer Reviews. In this function, TSCPA serves as a resource by assisting your firm in scheduling a review, selecting a reviewer and finalizing your firm's report through the committee acceptance process.
All Tennessee CPA firms are required to participate in an approved peer review program if the firm issues reports purporting to be in accordance with AICPA professional standards. For purposes of the AICPA Peer Review Program Standards, an accounting and auditing practice is defined as:
Engagements performed under the Statements on Auditing Standards (SASs); Statements on Standards for Accounting and Review Services (SSARS); Statements on Standards for Attestation Engagements (SSAEs); and the Government Auditing Standards (the Yellow Book) issued by the U.S. Government Accountability Office (GAO) and engagements under PCAOB standards.
The Tennessee State Board of Accountancy (TSBA) has approved the AICPA Peer Review Program as acceptable practice monitoring programs.
Quick Reference Links
Peer Review Information for Firms
COVID-19 Impacts on Peer Review
To off-set impacts of the COVID-19 pandemic, the AICPA granted an automatic six-month extension to firms with peer review and corrective action due dates between Jan. 1 and Sept. 30, 2020. If your firm's due date was automatically extended, the new due dates are reflected in PRIMA. Despite the extended due dates, firms are not required to wait an additional six months. In order to avoid delays to the peer review completion and acceptance process, the AICPA offers a strategy for planning for a 2020 peer review that firms are encouraged to follow when possible.
Peer Review Process
All enrolled firms will utilize PRIMA, a web-based platform created by the AICPA, to complete various steps within the peer review process. The use of PRIMA is required for both AICPA member and non-member firms enrolled in the program. This includes firm enrollment, review scheduling, responding to matters and findings identified during the peer review, and completion of corrective actions. For more information on PRIMA, including training videos specific to enrolled firms, please visit the AICPA's PRIMA web page.
Enrollment - All firms who wish to undergo a peer review must first enroll in a peer review program using PRIMA. To enroll your firm, visit https://prima.aicpa.org to complete the enrollment form.
After a firm's enrollment form has been received, a due date for the firm's initial review is assigned. Generally, the due date for the firm's first review is 18 months from the date of enrollment or the date they should have enrolled.
Scheduling - Approximately 6-9 months before a firm's review due date, the firm will receive a notification via email with instructions on submitting the information required for scheduling reviews using the online PRIMA system. This information must be completed by the firm in PRIMA in order to schedule a review. It is the firm's responsibility to choose its own reviewer. A list of qualified reviewers is available here. The review should not commence until the firm has received notification that the reviewer has been approved to perform the review.
After the Review - Once the review has been completed, the reviewer will issue a report to the firm. If the firm receives a rating of pass on its peer review, the firm does not need to submit the report to the administering entity. Reports with a rating of pass with deficiencies or fail should be submitted along with the firm's letter of response within 30 days of receiving the report or by the firm's review due date, whichever is earlier.
Administrative and Technical Reviews - The administrative review ensures that all the required documents from the reviewer and the firm are received and complete. The technical reviewer determines whether the review has been conducted in accordance with governing standards and whether the firm has responded to any matters or deficiencies in an appropriate manner.
Committee Process - Once all of the review documents have been through the administrative and technical review process, they are presented to the Peer Review Committee for consideration of acceptance. After the Committee meets and accepts a review, firms should receive the review acceptance letter from TSCPA within 10 days. However, some firms may be required to perform certain follow-up actions before the review can be closed. Generally, the firm's next review due date is set three years later.
Change in Firm Structure
If your firm has gone through or is currently experiencing a dissolution, merger, purchase, sale or name change, please complete the applicable pages of the Peer Review Firm Structure Change Form. This form may also be used to update AICPA/TSCPA records if an AICPA member has changed employers. Please send the completed form to firstname.lastname@example.org.
Types of Reviews
System Review - This type of review is for firms that perform engagements under the Statement on Auditing Standards (SASs,) the Government Auditing Standards (Yellow Book), examinations of prospective financial information under the Statement on Standards for Attestation Engagements (SSAEs), examinations of service organizations (SOC 1 reports) or audits of non-SEC issuers performed pursuant to the standards of the PCAOB.
In a system review, the reviewer will study and evaluate a CPA firm's quality control policies and procedures that were in effect during the peer review year. This includes interviewing firm personnel and examining administrative files. To evaluate the effectiveness of the system and the degree of compliance with the system, the reviewer will test a reasonable cross-section of the firm's engagements with a focus on high-risk engagements in addition to significant risk areas where the possibility exists of engagements being performed and/or reported on that are not in accordance with professional standards in all material respects. The majority of the procedures in a System Review should be performed at the reviewed firm's office.
Engagement Review - This type of review is for firms that are not required to have a system review and only issue reports under SSARS or services under the SSAEs not included in System Reviews.
The objective of an Engagement Review is to evaluate whether engagements submitted for review are performed and reported on in conformity with applicable professional standards in all material respects. An Engagement Review consists of reading the financial statements or information submitted by the reviewed firm and the accountant's report thereon, together with certain background information and representations and the applicable documentation required by professional standards.
Administrative fees have been established to cover the costs of administering the Peer Review Program in Tennessee. These fees are in addition to reviewer fees and are invoiced annually. Firms who are dropped or terminated from the program are also subject to a $250 reinstatement fee.
To support the cost of administering more complex reviews, an additional $100 fee will be charged annually to firms that perform system review engagements in must-select areas.
|TSCPA Member Firms|
|System Review - 1 Professional||$360|
|System Review - 2-9 Professionals||$490|
|System Review - 10+ Professionals||$615|
|Non-TSCPA Member Firms|
|System Review - 1 Professional||$730|
|System Review - 2-9 Professionals||$900|
|System Review - 10+ Professionals||$1130|
The AICPA has created a series of practice aids to assist firms. View Practice Aids