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News

AICPA Board Votes to Approve Peer Review Standards on Nov. 4

By:
Karen Sibayan
Published Date:
Nov 6, 2024

iStock-826741128 Accounting Standards

According to the Journal of Accountancy, the AICPA Peer Review Board (PRB) approved a standards update on Nov. 4 that improved the alignment of peer review standards with new quality management (QM) standards while clarifying and improving existing technical guidance. 

The Journal said that the Peer Review Standards Update (PRSU) No. 2, Reviewing a Firm's System of Quality Management and Omnibus Technical Enhancements, will be published later in November. 

PRSU No. 2's omnibus technical enhancements are effective for peer reviews starting on or after Dec. 1. Meanwhile, its QM-related revisions are effective for peer reviews with years ending on or after Dec. 31, 2025. Firms have until Dec. 15, 2025, to establish a QM system to align with AICPA standards, the Journal reported. 

Changes issued in PRSU No. 2 include: the peer review terminology and phrasing revisions must conform with the new QM standard; requirements, related applications, and other explanatory material paragraphs were adapted, where appropriate, to address risk-based considerations resulting from the requirements of the QM standards; technical changes intended to meet the program's current needs by clarifying or expanding the existing requirements and application and other explanatory material were made to continue the PRB's effort to maintain standards that are easy to read, understand and apply and minor error corrections, the Journal stated.

According to the Journal. an exposure draft of PRSU No. 2 was approved for issuance last November. The final update considered stakeholder feedback.  

Updates in this proposed PRSU included changes to different requirements and applications and other explanatory material of the standards to account for appropriate terminology and related requirements of the QM standards.  

Further, several other technical enhancements or minor corrections were proposed in the proposal as part of the board’s continued effort to maintain standards that are easy to read, understand and apply. In addition to conforming revisions that address the name change from “quality control” to “quality management,” there were revisions that the board thought to be most responsive to the recently issued QM standards, among other omnibus technical enhancements to offer added guidance or clarification related to existing requirements or application and other explanatory material. 

The Journal reported that during the PRB's Nov. 4 open session, the board also found that a retiring partner is permitted to continue serving as a team member on peer reviews for 36 months.