Peer joy.

• Author: Wille, Mark F.

I 've been a peer reviewer since the early 1990s. Clients, colleagues and students often ask me what the most common problems are that I encounter during peer reviews. The following are some recurring issues I've come across, and some recommendations for avoiding them.

Firm Issues

* Missing/Outdated Quality Control Documentation: Have a quality control document in place. The document should be communicated throughout the linn and (given the changing standards environment revised within the last three years. The AICPA has a helpful tool kit at www.calrpa.org/AICPAprhit.

* Incomplete Independence Documentation: Signed independence forms should exist for all staff and perdiem staff. Forms should include a Firm's Qitality Control Document section that they have read and understand.

* Incomplete Client Listings: California had to re-perform more than 70 peer reviews because firms neglected to list all client engagements. Ensure client listings are complete. The AICPA is testing the firm's client list with ERISA and other agencies to ensure completeness. Insufficient Evidence of Firm Monitoring Procedures: Maintain appropriate documentation regarding

the firm's annual monitoring process. A best practice is to utilize the AiCPA peer review checklists for audits, reviews and compilations. Members of the engagement team being reviewed are not the ones who should be completing those checklists and stall' should present engagement findings to everyone else. Practice improvement areas should be identified and the overall process should be documented.

Audit Engagements

Regarding audit engagements, some recommendations and areas of heightened scrutiny during peer review include:

* Review ihe financial statement for errors, especially ihe areas of report, disclosures and headers and footers.

* Ensure engagement letters are signed and contain current language requirements.

* Verily representation letters are signed, coverall periods presented in the financial statements and contain current language requirements.

* Confirm requisite legal letters have been obtained or verify sufficient documentation exists as in why legal letters were unnecessary.

* Ensure necessary audit confirmations are obtained or confirm sufficient documentation exists supporting why confirmations were unnecessary.

* Verify that an internal control letter exists or document why it was unnecessary.

* Review documentation of required communications with those charged with client...