TSCPA and the Texas State Board of Public Accountancy are participating in a pilot program in close cooperation with the American Institute of CPAs (AICPA), North Carolina, Ohio, Oklahoma, South Dakota, and Tennessee.

The AICPA Peer Review Facilitated State Board Access program will create a nationally uniform system through which CPA firms can satisfy state board or licensing body peer review information submission requirements, increase transparency, and retain control over their peer review results.

The pilot program is still in the development stage, but the goal is to have the pilot operating in November 2007 with national implementation occurring in 2009.

What is Facilitated State Board Access?
It is a new process that the AICPA has created to help the profession keep up with the evolving changes in the business and regulatory environments and to address the demand for greater peer review transparency.

How Will This Benefit My Firm?
The AICPA and CPA state societies are currently working together to allow this process to become the primary means by which all state Boards of Accountancy (BOAs) obtain peer review results. Over time, this new process will help to make submission of your firm’s peer review information easier. However, until our national goal is reached, this new process WILL NOT replace the current peer review information submission requirements of the Texas State Board of Public Accountancy which licenses firms practicing in Texas. Therefore, firms will need to follow the current Texas State Board of Public Accountancy requirements until notified differently.
[ See TSBPA Board Rule §527.6 ] (.PDF)

What This Means for Your Firm
This new process uses the existing peer review process to facilitate the voluntary disclosure of peer review results to BOAs. To accommodate this new process, the AICPA has made some alterations to your peer review acceptance process. Firms to which the process will be applicable will receive a notice of these changes after piloting commences.

Why Facilitated State Board Access?
After carefully evaluating the various options, stakeholders determined that the best way to address the user demands for greater peer review transparency, while considering member and state CPA society concerns, was to use the existing peer review process to facilitate the voluntary disclosure of peer review results to BOAs.

The intent of this new process is to create a nationally uniform system through which CPA firms can satisfy state board or licensing body peer review information submission requirements, increase transparency, and retain control over their peer review results. The AICPA and state CPA societies are currently working together to allow this process to become the primary means by which all BOAs obtain peer review results. Over time, this new process will help to make submission of your firm’s peer review information easier.
Refer to the Pilot FAQ for additional information.

When Will Facilitated State Board Access Be Implemented?
To assist in ensuring a smooth transition and implementation, Texas will pilot and test the Facilitated State Board Access process in the near future. After the testing/piloting phase is complete, we will continue the process to assist with any refinements deemed necessary. We expect to complete the pilot and consider the opportunity for early adoption in May 2008 with full national implementation expected by 2009 in connection with the acceptance of new peer review reports issued under the revised AICPA Standards for Performing and Reporting on Peer Reviews.

How Will This New Process Work?
Facilitated State Board Access uses an opt-out process that allows peer review results to be made available to select BOAs on a voluntary firm basis, using a secure, BOA limited-access-only Web site available only to authorized Texas State Board of Public Accountancy representatives.

During the pilot, firms in Texas will receive an additional notice and instructions along with their firm’s next peer review acceptance letter that notifies them of the Administering Entity’s (AE) intent to post their peer review information. For firms whose main office is located in Texas, their peer review administering entity is the Texas Society of CPAs.

Firms that are not members of the AICPA Employee Benefit Plan Audit Quality Center, Governmental Audit Quality Center or Private Companies Practice Section (PCPS) will be given the opportunity to opt out of the process.

Below are the details of how the new process will work.

In Texas, the process will entail:

• Making peer review results available to select BOAs on a voluntary firm basis, using a secure, BOA limited-access-only Web site that will be available only to authorized Texas State Board of Public Accountancy representatives. The Texas Society of CPAs will post applicable peer review information related to a firm’s most recently accepted review to this BOA limited-access-only Web site unless the firm requests that its information be excluded. The firm will be notified by the Texas Society of CPAs, via a notice included with the firm’s peer review acceptance letter of its intention to post the firm’s peer review results during the peer review acceptance process and the firm will have 30 days to opt out of the process.
  
  
• If the firm does not opt out, the firm’s peer review results will be added to the secure BOA Web site accessible only by authorized Texas State Board of Public Accountancy representatives. The firm’s managing partner and peer review contact will then receive a confirmation via email (or regular mail if email is not available) notifying them of the posting and offering them the opportunity to make the firm’s results available to additional select BOAs. It is anticipated that this option will be beneficial, over time, to firms with multi-state practices.

Firms can request that their results be made available to more than one BOA, so long as the BOAs require peer review and are not prohibited from obtaining access to peer review information. However, during the pilot, access will be limited only to those BOAs participating in the pilot program.
During the pilot phase, firms will be provided with the opportunity to expand access to other BOAs. However, access will not be granted until the selected state or states are participating in the Facilitated State Board Access program.

Firms will be notified by the Texas Society of CPAs when the BOA(s) that they have selected to expand access to are participating in the Facilitated State Board Access program. This will remind firms of their selection and provide them with the opportunity to change their decision regarding expanded access.

What Documents Will Be Posted Under This Process?
The number of documents posted to the secure limited-access-only Web site for a firm may vary based upon the results of the peer review. A firm will not choose which documents will be posted as each of those that are applicable (based on the results of the review) will be posted. It is important to note that unless a firm opts out, all applicable documents will be posted even if it is not a state requirement.

The following documents will be posted to the secure BOA Web site, as applicable:

• Peer review report
• Letter of comments
• Letter of response
• Acceptance letter
• Letter(s) signed by the reviewed firm indicating that the peer review documents have been accepted with the understanding that the reviewed firm agrees to take certain actions
• Letter notifying the reviewed firm or individual that certain required actions have been completed

Firms that are not members of the AICPA Employee Benefit Plan Audit Quality Center, Governmental Audit Quality Center or Private Companies Practice Section (PCPS) will have the opportunity to opt out at any time even after their information has been posted by notifying the Texas Society of CPAs in writing.

Once the notification is received, the Texas Society of CPAs will remove the posted information. If a firm chooses to opt out, it is important to note that certain information (which is currently publicly available) will be posted to the secure limited-access-only Web site. This information will help us to maintain a complete database of all firms in the peer review program. The information that will remain posted should a firm opt out is as follows:

• Firm’s name and address
• Firm’s enrollment in the Peer Review Program
• The date of acceptance and the period covered by the firm’s most recently accepted peer review
• If the firm’s enrollment in the program was terminated

We are committed to keeping you informed throughout piloting, early adoption and during the full national implementation process.

For Additional Information or Questions

Jerry Cross, CPA
Director, TSCPA Peer Review
jcross@tscpa.net
800.428.0272 x617

Read the Pilot FAQ for further details or visit the AICPA Web site.