Chair's corner.

• Author: Voynich, Scott

The seeds for the peer review process as we know it today were first sown in 1977 with the establishment of the AICPA Division for CPA Firms which created the SEC Practice Section and the Private Companies Practice Section. One of the requirements for membership in either of these voluntary sections was the completion of a peer review every three years with the results of that review available in a public file. This process was a dramatic voluntary step that distinguished CPAs as not only setting the highest standards, but willing to shine the light on their work.

Eleven years later, in 1988, the membership of the AICPA voted to extend the requirement for peer review to all public accounting firms who performed audit and accounting services and whose members were members of the AICPA. An important part in gaining support for passage of this bylaw amendment was that the peer review process would serve a remedial need and that the results would remain confidential, unlike the public file in the voluntary sections of the Division for CPA Firms. Member approval of mandatory peer review for membership in the AICPA was a significant step along the path of enhanced quality and improved performance.

Peer review serves an important need in maintaining and improving the quality of practice in the United States. Of the 45,000 CPA firms that are members of the AICPA, approximately 34,000 firms provide audit and accounting services that make them subject to peer review. In fact, since the introduction of this concept in 1977, approximately 36 state boards of accountancy have endorsed the concept of peer review by including it as a requirement for licensure in their states. Several other states are in the process of moving their laws or regulations to add this program to their list of expectations of firms practicing within...