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How to Prepare For a Peer Review

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What kind of peer review do you need?

CPA firms registered in Ohio that issue financial statements must undergo peer review every three years in order to renew their firm registration. The kind of review required is a rather simple determination. If you perform audits, you’ll need a System Review. If you limit your services to compilations and reviews, you’re allowed to have an Engagement Review.

What’s the difference between a System Review and an Engagement Review?

A System Review involves evaluating a Firm’s system of quality control and conducting tests to determine whether or not they’ve complied with it. This is done generally by first obtaining an understanding of the system, then conducting tests, which include an examination of working papers and financial statements for a cross-section of the Firm’s accounting and auditing practice. System Reviews must (except in very limited circumstances) be performed at the reviewed firm’s office.  

An Engagement Review consists of reviewing the financial statements along with any documentation required by professional standards (engagement letters, analytical procedures, etc) for a sample of engagements. No evaluation or testing of the reviewed Firm’s system is performed. Engagement Reviews can be performed remotely.

Please feel free to call me if you have any questions.

 

Jon Majkut, CPA


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