CalCPA Preissuance Checklist: Report Peer Reviews
—Effective April 30, 2006General r Is the peer review year end three years from the prior peer review year end? If not, was a change approved?
r Was the required rep letter obtained from the firm and was it dated properly?
r If any engagements were excluded from the peer review, was a written request for a wavier submitted and written approval obtained from the administering entity prior to the commencement of the review?
r Are the workpapers and report submitted by the due date or within 30 days from the completion date?
r If a review wasn’t completed and submitted within the required time frames, was an extension requested?
r Are the name of the firm (including the correct spelling), peer review year-end date, and report date consistent? (The report date should be the date the review was completed.)
r Are the current forms, report format, and language used?
r Was the firm requested to send a signed copy of the report to the Peer Review Office? (Even if there are no comments, firms must sign and forward a copy of the report to the Peer review Office.)
r Is the engagement summary form prepared by the firm properly and fully completed? (It needs to be signed and dated, the year end period must be the same as the peer review period, and the number of engagements must be shown by partner.)
r Was the correct number of engagements selected for review? (Ordinarily two engagements need to be selected if there is only one owner. If there is more than one owner, one engagement needs to be selected from each owner responsible for issuance of reports. Be aware that reviewers should not select more engagements than recommended by the Peer Review Manual.)
r Was the reviewer’s checklist fully and properly completed?
r Is the Statistics Data Sheet completed properly especially as it relates to the number of comments, if any are repeats, and if any are substandard and if so is Part II completed?
Reports r Is the report wording that was effective 1/1/05 used?
r Is the report signed correctly? (Remember if there are comments, the acknowledgement sentence must state that the firm will implement the specific recommendations.)
r If problems are being reported, has the correct wording been used (“Comments” not “Findings”)? However, if the problem resulted in a substandard engagement, did the caption read “Significant Comments”?
r Are the recommendations specific? Remember for report reviews, recommendations shouldn’t contain options since firms must acknowledge that the recommended action would be implemented.
r Are repeat comments noted as such, and is the number of repeat comments properly noted on the Statistics Data Sheet? (Problems aren’t required to be exactly the same to be classified as a repeat finding. For purposes of determining whether a comment is a repeat in a report review, some problems are classified in two broad categories -- reporting and presentation. Repeat problems within these grouping are considered repeat comments. For example, if the prior LOC contained a comment that the firm’s reports didn’t mention supplementary information and the current LOC mentions that the firm’s reports didn’t include all periods presented, the current year comment would be considered a repeat reporting comment. Wording along the following lines would then be needed in the comment: “Reporting problems were noted during the firm’s previous peer review.”)
r If there is a repeat comment that was also a repeat in the firm’s prior review, does the comment indicate this situation? (An example would be “Presentation problems were noted during the firm’s previous peer reviews.” Note that this wording just makes reference to “previous reviews” and does not state the number of times the problem had been mentioned in prior reviews.)
r Does the peer review year-end date encompass the year-end dates for all the financial statements that are reviewed?
Matters for Further Consideration (MFC)r Are the MFC forms fully completed?
r Is there a completed MFC supporting each problem mentioned in the report?
r Did the reviewer sign all MFCs, does the MFC indicate whether or not the firm agrees with the problem, and if the problem is to be included in the report?
r Is the professional standard reference completed?
r If the matter is not included in the report, is an appropriate reason given? (Stating that a matter is immaterial can be adequate justification for not including a problem in the report. However, while stating that a certain problem didn’t make the F/Ss misleading is a valid reason for not categorizing an engagement as substandard, it is not a valid reason for excluding the problem as a comment in the report.)
r Is the deficiency cross-referenced to the questionnaires?
r If there is more than one partner, does the MFC indicate with whom the matter was discussed?
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