Rebuilding peer review: exposure draft outlines proposed changes and call for transparency: it could be the end of the world as we know it. At least, the end of the peer review world as we know it. A new exposure draft outlines provocative changes to the peer review process, from changes to the grading system to enhanced options for sharing the results.

• Author: Johnson, Amy

On April 16, the AICPA Peer Review Board issued Exposure Draft of Proposed Revisions to the AICPA Standards for Performing and Reporting on Peer Reviews, which includes a mechanism for firms to effectively comply with state board licensing requirements and increase transparency for peer review results.

The draft culminates several years of work in which special task forces and the AICPA Board of Directors thoroughly reviewed the current AICPA Peer Review Program to ensure it was meeting the original goals for which it was created--continually enhancing the quality of accounting, auditing and attestation services performed by AICPA members in public practice.

The environment in which public accounting firms are working is vastly different than in 1988 when the AICPA Peer Review Program was adopted. That was before the spate of corporate accounting scandals questioned the integrity of public company financial reporting and to some degree, quality control standards in public accounting practices.

Today's environment is full of new business and regulatory mandates that are forcing greater transparency in all facets of business. State Boards of Accountancy (BOAs) are increasingly calling for greater access to, and involvement with, peer review to ensure more consistent quality control standards. Currently, 39 states require peer review as a condition of relicensure.

There has been much debate about the issue of peer review transparency, but the AICPA and most state CPA societies have agreed on one thing--if there is to be greater peer review transparency, the profession must take the lead to avoid additional regulation and the erosion of consistency in the process.

As a result, the AICPA undertook a full evaluation of the current Peer Review Program to find solutions that would maintain uniformity of the program nationwide while preserving the profession's role in the peer review process and its public protection mandate.

The AICPA Board of Directors conducted an online poll of users and then convened a task force to review the results and issue recommendations. Ohio Society member Lee Wunschel, partner with Lublin, Sussman Group LLP in Toledo, chaired the AICPA task force.

According to Wunschel, the task force's most significant recommendation is to move firms toward greater voluntary transparency in a way that ensures they will not be adversely affected.

"In today's environment, we expect our clients to be more transparent with their financial...