Are there problems in the peer review process?

• Author: Dickson, Michael R.
• Position: A message FROM THE CHAIR

The accounting profession has seen sweeping changes to the audit over the last couple of years. The spotlight has now shifted and is beginning to focus on peer review. Could peer review be subject to an increase in regulation?

Whether or not there should be changes, and the nature of any changes, has sparked much debate among CPAs. The peer review debate centers around four main questions.

Does the current peer review process work?

Through my discussions with members, the general sentiment seems to be that the peer review program is on-target and working. There are those that see the need for changes in the details and fine-tuning of the process. However, there are many that value peer review as it exists today.

Should the peer review program remain educational or should it become more enforcement oriented?

Determining the appropriate level of education versus enforcement is one of the most controversial topics of debate. CPAs are both passionate and divided on the issue. On one side, there are those that feel the program should retain the educational focus, especially for a firm's initial reviews. This allows firms to learn and grow from the experience without fear of immediate repercussions for what may have been a minor oversight. Others, however, are in favor of more swift and severe repercussions for failure to improve based on past peer reviews.

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Some of the discussed repercussions include:

* Issuing harsher fee penalties.

* Publicizing the firm's name on the Web sites of the American Institute of CPAs, The Ohio Society of CPAs, and the Accountancy Board of Ohio.

The Accountancy Board has already begun targeting firms that don't meet professional standards, even going so far as to revoke CPA certificates and/or firm registrations. Does this level of enforcement need to go even farther? In today's business environment, with the public's trust in the financial markets still tenuous, is it wise to let the acknowledgement of even a minor misstep be treated as merely educational?

Should there be a public file in place for all firms whether or not they are enrolled in the Partnering for CPA Practice Success program?

The general consensus seems to be in favor of exploring a public file as a possible change to the peer review program. A public file would allow anyone to access the peer review records of a company. If the firm had a successful review, why wouldn't the firm want the public to see the results? On the flip...