Should peer review results be public?

Here's your chance to express your view on whether peer review results should be available to the public or only to state boards of accountancy.

At its Spring 2004 meeting, the AICPA's governing council approved a resolution supporting increased transparency in the peer review process. It also authorized a member awareness program to inform members about the issues surrounding peer review transparency and to assess their opinions about two possible ways to make peer review results more available. The two possible ways are:

1. Creating a public file that would be open to inspection by the general public, or

2. Creating a state regulatory file open to inspection only by state boards of accountancy Greater transparency: a badge of honor

Today, almost 35,000 U.S. accounting firms rely on peer review to demonstrate that their accounting and auditing practices meet the highest standards. About 6,400 voluntarily place their peer review results in a public file accessible to anyone via the Internet. Approximately another 15,000 firms provide peer review results to regulatory bodies or to clients as part of regulatory requirements, for example, the Government Accountability Office (GAO) Yellow Book. In addition, many firms communicate these facts in their marketing literature, and some suggest that prospective clients request peer review reports from all firms they are considering engaging.

Moving away from the foundation of confidentiality

Probably the most common argument against making all peer review results public is that any such change would violate the commitment of confidentiality that the AICPA made to its members in 1988. Opponents of greater transparency argue that asking firms to make their peer review results public would violate these promises. When members agreed to mandatory peer review, it was designed as an educational and remedial program that would strengthen quality control. Its role was corrective, not punitive, and confidentiality was a critical component of passage.

Others argue, however, that in today's environment of heightened accountability, it is becoming increasingly difficult to support this kind of confidentiality. This view holds that the primary user of peer review has expanded from AICPA members alone and now includes regulators, clients, and credit grantors. These constituents expect greater transparency, but have no way of evaluating peer review results as long as they remain confidential.

Other concerns

Another...