An Accounting and Auditing Practice

An Accounting and Auditing Practice

For purposes of the AICPA Peer Review Program Standards, an accounting and auditing practice is defined as all of a CPA firm’s engagements performed under the Statements on Auditing Standards (SASs), Statements on Standards for Accounting and Review Services (SSARS), Statements on Standards for Attestation Engagements (SSAEs) and Government Auditing Standards (the Yellow Book), issued by the U.S. General Accounting Office (GAO) and audits of non-SEC issuers performed pursuant to the standards of the PCAOB.

System Review

System Review

A System Review includes determining whether the firm’s system of quality control for its accounting and auditing practice is designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards, including SQCS No. 8, in all material respects. This type of review is for firms that perform engagements under the SASs, the Government Auditing Standards (Yellow Book), examinations of prospective financial information under the Statement on Standards for Attestation Engagements (SSAEs), or audits of non-SEC issuers performed pursuant to the standards of the PCAOB.

Engagement Review

Engagement Review

The objective of an Engagement Review is to evaluate whether engagements submitted for review are performed and reported on in conformity with applicable professional standards in all material respects. An Engagement Review consists of reading the financial statements or information submitted by the reviewed firm and the accountant’s report thereon, together with certain background information and representations and the applicable documentation required by professional standards.

  • Firm Principles

    Morality may consist solely in the courage of making a choice.
    Leo Blum
    To aim at excellence, our reputation, and friends, and all must be ventured; to aim at the average we run no risk and provide little service.
    Oliver Goldsmith
    Excellence is the gradual result of always striving to do better.
    Pat Riley
    The harder you work, the harder it is to surrender.
    Vince Lambardi
    Would you want to do business with a person who was 99% honest?
    Sidney Madwed
    Genius is one percent inspiration and ninety-nine percent perspiration.
    Thomas Edison
    Man's biggest mistake is to believe that he's working for someone else.
    Nashua Cavalier
    Excellence can be attained if you care more than others think is wise, Risk more than others think is safe, Dream more than others think is practical, and Expect more than others think is possible.
    Anon
    If it is not right do not do it; if it is not true do not say it.
    Marcus Aurelius
    There are two kinds of people, those who do the work and those who take the credit. Try to be in the first group; there is less competition there.
    Indira Gandhi
    Excellence is doing ordinary things extraordinarily well.
    John W Gardner
    The integrity of men is to be measured by their conduct, not by their professions.
    Junius
    Honesty is the cornerstone of all success, without which confidence and ability to perform shall cease to exist.
    Mary Kay Ash
    I would give no thought of what the world might say of me, if I could only transmit to posterity the reputation of an honest man.
    Sam Houston
    Real excellence and humility are not incompatible one with the other, on the contrary they are twin sisters.
    Jean Baptiste Lacordaire
    An honest man's the noblest work of God.
    Alexander Pope
    Integrity is the first step to true greatness. Men love to praise, but are slow to practice it. To maintain it in high places costs self-denial; in all places it is liable to opposition, but its end is glorious, and the universe will yet do it homage.
    Charles Simmons
    The highest reward for a person's toil is not what they get for it, but what they become by it.
    John Ruskin
    Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful.
    Samuel Johnson
    Honesty is the first chapter in the book of wisdom.
    Thomas Jefferson
    It is not from ourselves that we learn to be better than we are.
    Wendell Berry
    There is always a best way of doing everything.
    Ralph Waldo Emerson
    I hope I shall possess firmness and virtue enough to maintain what I consider the most enviable of all titles, the character of an honest man.
    George Washington
    A racehorse that consistently runs just a second faster than another horse is worth millions of dollars more. Be willing to give that extra effort that separates the winner from the one in second place.
    H. Jackson Brown Jr
    We are what we repeatedly do. Excellence, then, is not an act, but a habit.
    Aristotle
    Integrity is the essence of everything successful.
    Richard Buckminster Fuller
    A life lived with integrity -- even if it lacks the trappings of fame and fortune is a shinning star in whose light others may follow in the years to come.
    Dennis Waitley
    It is not what we eat but what we digest that makes us strong; not what we gain but what we save that makes us rich; not what we read but what we remember that makes us learned; and not what we profess but what we practice that gives us integrity.
    Francis Bacon
    No man should advocate a course in private that he's ashamed to admit in public.
    George McGovern
    Every noble work is at first impossible.
    Thomas Carlyle
    There is no twilight zone of honesty in business. A thing is right or it's wrong. It's black or it's white.
    John F. Dodge
    The daily grind of hard work gets a person polished.
    Source unknown

Peer Reviews

A peer review is always an intimidating procedure but it does not have to be unpleasant.  Kevin D. Smith approaches a peer review as an opportunity to educate fellow CPAs and help firms meet the high standards expected of the accounting profession.  The selection of a peer reviewer is critical to receiving the full benefit of a peer review.  Kevin has extensive knowledge of the standards and performs about 60 peer reviews each year for firms in Arizona, California and Alaska.  Kevin can perform both system and engagement reviews in an efficient and cost-effective manner which will help improve your knowledge and your ability to serve your clients.

Does your firm need a peer review?

In order to be admitted or to retain membership in the American Institute of Certified Public Accountants (AICPA), members of the AICPA who are engaged in the practice of public accounting in the United States or its territories are required to be practicing as partners or employees of firms enrolled in an institute approved practice-monitoring program.  A member can meet the requirement if his or her firm is enrolled in the AICPA Peer Review Program. (Firms that are required to be registered with and inspected by the Public Company Accounting Oversight Board (PCAOB) and those performing audits of non-SEC issuers pursuant to the standards of the PCAOB are required to have their AICPA peer review administered by the National PRC.)

Actually, the preceding paragraph is true for firms with an accounting and auditing practice that issues reports purporting to be in accordance with AICPA professional standards. If a firm does not perform services that include issuing such reports, it is not required to enroll in a practice-monitoring program. However, firms should consult with their State Board of Accountancy (SBOA) to determine if the State Board rules require enrollment in a practice monitoring program.

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