CHANGES TO PEER REVIEW.

What do you think about changing the requirements for on-site peer reviews? How would you feel about replacing the off-site review with a report review available to firms that only perform compilations? These are just some of the revisions to Standards for Performing and Reporting on Peer Reviews that have been proposed by the AICPA peer review board.

Not just a name change

The exposure draft (ED) replaces throughout the peer review standards the term on-site peer review with the term systemic review. The board believes that systemic review more accurately describes this kind of peer review. Why? There has been confusion in the past because on-site reviews have been performed at a location other than a reviewed firm's office and because firms eligible to have off-site reviews could elect to have on-site reviews.

Firms that have a systemic review are expected to have the review on site unless the firm is a sole practitioner with four or fewer staff or it does not perform SAS or SSAE engagements.

More systemic reviews

To enhance the quality of the peer reviews, the board is proposing that all firms that perform review engagements be required to have a systemic review. Currently, firms that perform only review and compilation engagements are allowed to have off-site reviews. No longer. Even if a firm performs only one review engagement, it will have to have a systemic review. Only firms that just do compilations will be allowed to have an off-site review.

The board expects firms that have performed review engagements and have had off-site reviews will incur additional costs when they have a systemic review. Nonetheless, it feels the firms and the public would be better served by the changes.

"The firms that do reviews and compilations, which previously had off-site reviews, will have to pay more for the systemic reviews," said Dale W. Bonn, managing partner of Vine, Dahien, Werner & Co. in Lynnwood, Washington, and member of the AICPA peer review board. "However, the costs will be offset by a better review--a review that provides CPAs with a greater understanding of how they can run their firms more productively."

Bea L. Nahon, a sole practitioner in Bellevue, Washington, agrees. "Firms that have a systemic review are going to get more value for their money because they will sit down with the reviewer and get real information that they can put to use in their practices."

A new name for off-site

The ED also creates a new type of peer review...