Chris Rouse Windham 1 Brannon, PC Peer Review Whats going on - - PowerPoint PPT Presentation

chris rouse
SMART_READER_LITE
LIVE PREVIEW

Chris Rouse Windham 1 Brannon, PC Peer Review Whats going on - - PowerPoint PPT Presentation

Peer Review Whats going on, and how to get through it Presented by Chris Rouse Windham 1 Brannon, PC Peer Review Whats going on Agenda AICPA Audit Quality Initiative Peer Review Future How to Have a Successful Peer


slide-1
SLIDE 1

1

Peer Review – What’s going on, and how to get through it

Presented by

Chris Rouse

Windham Brannon, PC

slide-2
SLIDE 2

Peer Review – What’s going on

2

Agenda

  • AICPA Audit Quality Initiative
  • Peer Review Future
  • How to Have a Successful Peer Review
slide-3
SLIDE 3

Peer Review – What’s going on

3

AICPA Audit Quality Initiative

  • Initiated in 2014 in response to concerns of users of

financial statements about the quality of the work of practitioners of public accounting

  • Significant changes and efforts proposed included …
  • Competence and due care
  • Aligning CPA exam with real world practice
  • Ensure auditors adhere to the Code of Conduct

regarding competence and due care

slide-4
SLIDE 4

Peer Review – What’s going on

4

AICPA Audit Quality Initiative

  • Auditing and Quality Control Standards
  • Monitor application of Standards and provide

guidance, tools and education to meet needs of profession

  • Identify and understand where and how deficiencies
  • ccur so revisions can be to Standards and resources
  • Guidance, Tools, Learning and Resources
  • Enhance curricula, content and methods of instruction

to support areas the profession serves

  • Release a rigorous, profession-wide competency

framework validated by users and regulators

slide-5
SLIDE 5

Peer Review – What’s going on

5

AICPA Audit Quality Initiative

  • Practice Monitoring (Peer Review)
  • Enhance and expand peer review procedures
  • Address risks posed by low-volume auditors of high-

risk and complex engagements

  • Evaluate certain engagements promptly
  • Enhance the quality of peer reviewers
  • Develop peer review process that provides firms near

real-time feedback on their accounting and audit practice

slide-6
SLIDE 6

Peer Review – What’s going on

6

AICPA Audit Quality Initiative

  • Ethics Enforcement
  • Use available information to proactively identify

deficient audits and require corrections

  • Consider sanctions for firms not properly disclosing

their practice to peer review

  • Dialogue and Feedback
  • Engagement of all parties with interests in private

entity audits

slide-7
SLIDE 7

Peer Review – What’s going on

7

Peer Review Future

  • AICPA considering results of inspections performed by

regulators

  • President’s Council on Integrity and Efficiency
  • Study of +/-400 A-133 audits revealed about 50% with

deficiencies

  • Department of Labor
  • Over many years DOL inspections show about one-third
  • f employee benefit plan audits are deficient
  • Sample of 400 audits from 2011 had almost 40%

deficiency rate

  • PCAOB inspections
  • Consistently result in 20-30% deficiencies
  • Recent broker/dealer inspections were even higher
slide-8
SLIDE 8

Peer Review – What’s going on

8

Peer Review Future

  • AICPA Peer Review Committee enhanced oversight

program

  • Inspections currently being performed of engagements

when submitted but before going to Acceptance Body

  • Results are consistent with findings of regulator
  • versights
slide-9
SLIDE 9

Peer Review – What’s going on

9

Peer Review Future

  • The Future of Practice Monitoring
  • Phase One
  • Firms push engagement data to master server
  • The system continuously process the data and measures

it against engagement quality indicators

  • Firm’s internal dashboard gets real-time performance

snapshots

  • System would generate flags when performance not

meeting expected metrics

slide-10
SLIDE 10

Peer Review – What’s going on

10

Peer Review Future

  • The Future of Practice Monitoring
  • Phase Two
  • Dashboards could be shared with and customized for
  • ther users
  • “Seals” would show firm’s overall performance

measures

slide-11
SLIDE 11

Peer Review – What’s going on

11

How to Have a Successful Peer Review

  • What is a successful peer review?
  • Improves your ability to perform engagements in

conformity with professional and firm standards

  • Provides new knowledge about professional standards
  • Offers new perspectives on implementing standards
  • Suggests tips for preventing deficiencies
slide-12
SLIDE 12

Peer Review – What’s going on

12

How to Have a Successful Peer Review

  • How to prepare for peer Review
  • Starts when you finish your peer review
  • Rework you Quality Control Document
  • Complete and use the AICPA QC Questionnaire as a

basis

  • Tailor the QC Document practice aid using the QC

Questionnaire responses

  • For your engagement inspections, use the AICPA

Engagement Checklists

  • Use all the A&A supervisors to perform engagement

inspections

  • Use the AICPA website resources
slide-13
SLIDE 13

Peer Review – What’s going on

13

How to Have a Successful Peer Review

  • Chris’s Top 10 Peer Review Deficiencies
  • 1. Inadequate partner involvement
  • Manage the planning meeting
  • Go beyond “how’s it going”
  • Answer the question, “If you only had one day to do

this audit, what would you do?”

  • 2. Inadequate relevant CPE
  • Appropriate for level
  • Appropriate for industry
slide-14
SLIDE 14

Peer Review – What’s going on

14

How to Have a Successful Peer Review

  • Chris’s Top 10 Peer Review Deficiencies
  • 3. Failure to consult with others
  • Not just “when you’re unsure”
  • Reading vs Internal vs External
  • Early partner involvement
  • 4. Not tailoring audit and review work programs
  • Key is excellent risk assessment
  • Purchased practice aids are never right
  • Vision a planning meeting where you tailor the

programs

slide-15
SLIDE 15

Peer Review – What’s going on

15

How to Have a Successful Peer Review

  • Chris’s Top 10 Peer Review Deficiencies
  • 5. Misunderstanding sampling
  • Study practice aids and Audit Sampling Guide
  • Understand not sampling, attribute sampling and

monetary sampling

  • 6. Conversational review of workpapers is not effective
  • Knowing its right isn’t enough
  • Focus on accounting and audit matters first
  • Focus on staff development second
  • Don’t forget client service
slide-16
SLIDE 16

Peer Review – What’s going on

16

How to Have a Successful Peer Review

  • Chris’s Top 10 Peer Review Deficiencies
  • 7. Inadequate Engagement Quality Control Review
  • A cold pre-issuance review of financials, key area

workpapers and discussion with engagement partner

  • The EQCR policy should help manage your

engagement risk

  • 8. Inadequate communications with management and

governance

  • Find the value in the engagement for the client
  • Use a written Agenda
slide-17
SLIDE 17

Peer Review – What’s going on

17

How to Have a Successful Peer Review

  • Chris’s Top 10 Peer Review Deficiencies
  • 9. Documentation, documentation, documentation
  • Staple or upload yourself to the workpapers
  • Put a picture of your peer reviewer behind you and

imagine him/her looking over your shoulder while you prep the workpapers

  • 10. Ineffective monitoring
  • Ongoing for functional areas
  • Focused inspection for engagement performance
slide-18
SLIDE 18

Peer Review – What’s going on

18

So, once again, what is a successful peer review? One that … Improves your ability to perform engagements in conformity with professional and firm standards Provides new knowledge about professional standards Offers new perspectives on implementing standards Suggests tips for preventing deficiencies Key to success – Find a peer reviewer that knows more than you know

slide-19
SLIDE 19

Peer Review – What’s going on

19

Bon Auditpetite!

Questions?

Contact

Chris Rouse

crouse@windhambrannon.com

404-898-2000