Peer Review
Frequently Asked Questions

Who is required to be enrolled in the Peer Review Program?
Members of the American Institute of Certified Public Accountants (AICPA) and the Texas Society of Certified Public Accountants (TSCPA) are required by their respective bylaws to be practicing in firms that are enrolled in an AICPA approved practice monitoring program if they have an accounting and auditing practice.

Texas State Board of Public Accountancy Rules also require all Texas firms in public practice to be enrolled in an approved practice monitoring program as described in the Rules Section 527.4 – Enrollment and Participation.

A firm is considered to be in public practice if it performs compilations or reviews under the Statements on Standards for Accounting and Review Services, forecasts, projections or any other engagements under the Statements on Standards for Attestation Engagements, any audits under the Statements on Auditing Standards or Governmental Auditing Standards, and certain other special reports.

Please note that if a firm’s highest level of service is to perform compilations that are restricted to management use only in which an engagement letter is obtained in lieu of issuing a compilation report, the firm is still required to enroll in the Peer Review Program, as stated in Rules Section 527.4 (a) – Enrollment and Participation.

If you are unclear as to whether the firm is required to enroll in the Peer Review program, contact the Texas State Board of Public Accountancy at 512-305-7800 or the Peer Review Department of the Texas Society of CPA’s at 800-428-0272.

Firms that are not required to be enrolled in Peer Review must annually submit a request for an exemption in writing to the State Board. Once a firm is enrolled in Peer Review, any changes in firm structure must be reported to the TSCPA by completing and mailing to the TSCPA the Change in Firm Structure Form (.PDF) .

How do I enroll in the Peer Review program and when will my first peer review be due?

In order to enroll in the Peer Review program, simply download the appropriate enrollment form at the links below and either mail the completed form to:

Peer Review Dept.
Texas Society of CPA’s
14651 Dallas Parkway, Suite 700
Dallas, TX 75254-7408

or fax to 972/687-8575.

The firm will be sent a letter acknowledging its enrollment and initial due date and can be used to verify a firm’s enrollment in peer review for the State Board requirements.

AICPA member firms enrollment form (.PDF).

Non-AICPA member firms enrollment form (.PDF).

The Texas State Board of Public Accountancy rules state that a firm licensed in Texas must have a peer review performed within 18 months of the date that it first started performing reviewable services. Once a firm’s peer review year-end has been established, that year-end should be maintained every three years thereafter, unless a change has been required or granted by the State Board or the administering entity.

What are the different types of peer reviews?

System Review - Firms that perform audits under the Statements on Auditing Standards or Governmental Auditing Standards, or examinations under the Statements on Standards for Attestation Engagements are required to undergo a system review. System reviews are generally conducted on-site at the firm’s office, and the peer reviewer will evaluate the adequacy of the design and compliance with the firm’s entire quality control system including the review of selected engagements.

Engagement Review – Firms that do not perform any audits or examinations as listed above are eligible for an engagement review. Engagement reviews are normally performed off-site (at the reviewer’s office) and are limited to the review of specific engagements only.

Report Review – Firms that only perform compilations omitting substantially all disclosures are eligible for a report review. A firm that performs compilations with selected information, where substantially all disclosures are omitted, must undergo an engagement review. Report reviews, like engagement reviews, are conducted off-site. Report reviews do not require that firms respond to deficiencies in a separate letter of response as is required in an engagement and system review, but simply require that the firm sign the report as an acknowledgement of the deficiencies noted and their agreement to comply with the recommendations as noted in the report by the peer reviewer.

For further information regarding the types of peer reviews, refer to the AICPA Peer Review Standards.

What will my peer review cost?

1. Annual administrative fee
2. Reviewer fee

Annual Administrative Fee
In order to cover the costs of administering peer reviews, Texas Society of CPAs' leadership has approved an annual fee structure for the administration of the peer review program. A table describing the fee structure is below:

* Firms having at least one owner a member of AICPA or TSCPA.
** Firms having no owners a member of AICPA or TSCPA.

Reviewer Fees

All system reviews are arranged on a firm on firm basis, which means that the firm must identify and hire a qualified peer reviewer themselves, in which case, the fee arrangements are negotiated directly with the peer reviewer.

Engagement and report reviews may be conducted on either a firm on firm basis or the firm may choose to have a CART (Committee Appointed Review Team) review. For firm on firm reviews, the fee arrangements are made directly with the peer reviewer. For CART reviews, a qualified peer reviewer is brought into the TSCPA offices to conduct the peer review, and for these types of reviews, the fee is $300 base plus an additional $75 for each engagement omitting disclosures and $150 for each engagement with disclosures. Generally, the scope on these types of peer reviews is limited to one engagement per level of service (reviews, compilations with disclosures, compilations omitting substantially all disclosures, etc.), with coverage of all partners/owners with responsibility for those types of engagements, with a minimum of two engagements as applicable. See further information regarding the CART program at Engagement/Report CART Information.

How do I find a qualified peer reviewer?

The AICPA has an online directory of qualified peer reviewers available at its Web site. The directory allows firms to select reviewers based on categories such as practice monitoring programs, Center memberships, practice areas, and specific industries. It is important that a reviewer be selected who has similar experience as the firm, both in practice areas and specific industries. Under “optional search criteria”, be sure that all boxes are checked for the practice areas applicable to the firm and for industries in which the firm performs audits and has a concentration.

All peer reviewers must be approved by the TSCPA prior to the commencement of the peer review. Once a peer reviewer has been selected, the firm must provide the team captain (and team member if applicable) information to the TSCPA on the Information Required for Scheduling Reviews Form. Should the review team be approved by the TSCPA, a letter confirming that will be sent to the firm and to the peer reviewer (team captain).

For additional helpful hints on finding a peer reviewer see the article, Tips for Selecting Your AICPA Peer Review Program Peer Reviewer.

What is the peer review process?

Download the peer review process flowchart (.PDF).

What do I submit to the Texas State Board of Public Accountancy?

In most cases, there are three documents that firms enrolled in the Peer Review Program are required to submit to the Texas State Board of Public Accountancy (TSBPA). These three documents are:

• Peer Review Reporting Form (.PDF)
• Notice of Date of Initial Peer Review
• Peer Review Compliance Reporting Form (see link to form below) / Final Letter of Acceptance

Peer Review Reporting Form

All firms must complete this form when registering for a Practice Unit License or when it has previously claimed an exemption from peer review but have begun performing reviewable services. It is the firm’s responsibility to inform the TSBPA within 30 days of the date it began performing reviewable services. On the form, the firm checks the sponsoring organization with which it has enrolled (firms enrolled with the TSCPA would check the third box, AICPA Peer Review Program administered by state CPA society or AICPA) and provides the peer review due date in the “assigned review date” space. If a due date has not yet been received, you may submit the form without the assigned review date and follow up with the date as soon as it has been established.

Notice of Date of Initial Peer Review

Newly enrolled firms in the Peer Review program will receive a notice informing them of the due date of their initial peer review by e-mail or by mail from the applicable sponsoring organization. This notice must be submitted to the TSBPA within 12 months of the initial licensing date or within 12 months of the first reviewable service as proof of enrollment.

Peer Review Compliance Reporting Form/Final Letter of Acceptance

When a firm’s peer review is completed, the Peer Review Compliance Reporting Form is sent to the firm along with the Final Letter of Acceptance from the TSCPA. These forms and any other reports or letters that are applicable to your type of review, as listed on the bottom half of the compliance form, must be submitted to the TSBPA within 10 days of receipt from the TSCPA. The Final Acceptance Letter will indicate the firm’s next peer review due date.

For additional State Board reporting information, and links to the above mentioned forms, refer to the TSBPA: Peer Review Program Overview section on its Web site.