Peer Review Overview

A Brief History

In 1988, the members of the American Institute of Certified Public Accountants (AICPA) overwhelmingly approved a proposal that requires AICPA members in public practice to participate in a practice-monitoring program.   With the adoption of this proposal, the AICPA implemented a peer review program of unprecedented scope in the CPA profession or any other.  Peer review helps assure users of CPA services that their CPA firm measures up to the profession's high standards of professionalism and is committed to improving the quality of its practice.

With over 320,000 members, the AICPA is the national professional organization of CPAs in public practice, industry, government, and education.  AICPA members are committed to the highest standards of quality, independence and ethics in their practice.  In its continuing effort to serve the public interest, the organization sets audit standards, upholds the profession's code of ethics, provides continuing professional education, administers peer review programs, and prepares and grades the Uniform CPA Examination.

What is Peer Review?

Carried out in conjunction with participating administering entities and overseen by the AICPA, the AICPA Peer Review Program requires CPAs to undergo a rigorous, outside review of their accounting and auditing practices once very three years.  These reviews determine whether a firm has suitable quality control policies and procedures and is complying with them.  Specifically, the reviews focus on the following:

• How the firm implements independence, integrity and objectivity requirements
• How personnel are managed
• How accounting and auditing engagements are performed
• Acceptance and continuation of clients and engagements
• Monitoring of the firm's work

This self-regulatory tool is designed to maintain and improve the quality of the accounting and auditing services performed by members. 

The reviewers are licensed CPAs who are selected from among the members of the AICPA and who have demonstrated they possess current knowledge of applicable professional standards.  During a review, an outside team independently selects a sample of a firm's engagements and assesses its work on those engagements.  The reviewer then reports back to the firm on its findings, making suggestions where improvements may be necessary, and provides the outcome of the review to the administering entity.  If a review uncovers deficiencies, the administering entity prescribes various corrective actions a firm must take or monitoring procedures to ensure a firm adheres to the profession's standards.  In this way, the AICPA consistently receives updates on the quality of its members' work and the performance of CPA firms.

New England Peer Review, Inc. - Bridge to Excellence

Since 1989, NEPR has served the AICPA Peer Review Program with pride and distinction. We are committed to continuing the tradition to provide service to enrolled firms who need assistance prior, during, and following a firm's peer review.

NEPR is not a membership organization, but exists for the sole purpose of administering the AICPA Peer Review Program for the states of Maine, New Hampshire, Rhode Island and Vermont.  NEPR is a non-profit entity, which is owned by the four CPA societies. 

NEPR administers the AICPA Peer Review Program to approximately 660 CPA firms in the four states.  Firms enrolled in the program with an accounting and/or auditing practice are required to have a peer review every three years.

Requirement for Membership or Licensure

Why Should A Firm or it's Clients Care if a Firm has a Peer Review?

Participation in the AICPA's Peer Review Program demonstrates a CPA firm's commitment to quality, integrity and service.

Many companies, investors, bankers and attorneys choose firms that participate in the Peer Review Program when selecting or recommending a CPA because they are more confident that peer reviewed firms have established a system of quality control to ensure that reports for a firm's clients are issued according to professional standards.  Furthermore, if a firm performs government audits under governmental auditing standards, state and/or federal agencies require proof of a firm's participation in peer review.

How Can I Check a Firm's Credentials?

Results of a firm's peer review are confidential as set forth in the AICPA Code of Professional Conduct. Information regarding any part of a firm's peer review may not be disclosed by the reviewer or the entity administering the peer review. Copies of a firm's peer review report may be obtained by contacting the CPA firm directly. However, if a firm is enrolled in the AICPA's Division for CPA Firms, the results are public information and copies of the report (and if issued, the LOC and LOR) may be obtained by calling the AICPA's Division for CPA Firms at 1-800-CPA-Firm.

How Do Clients Benefit?

Participation in the AICPA Peer Review Program provides CPAs with the opportunity to learn new or improved ways to run their firms and improve client services. This may be as simple as identifying possible inefficiencies, or as broad as determining opportunities to better serve clients.   Whatever the case, clients benefit because CPA services become more appropriate for their needs and responsive to the changing business environment.  What's more, clients can be sure their CPA firm measures up to the profession's high standards of quality and professionalism.  Peer review also keeps CPAs current on the latest standards and trends in accounting and auditing.  This translates into more knowledgeable advice for those who rely on CPA services.  Peer review offers the assurance that a certified public accounting firm is committed to performing at the very highest level.

Need Further Information?

Details regarding the peer review process can be found in the NEPR Peer Review Process Booklet.