Exit Conferences - The Value Added Approach

Team captains are concerned both with providing peer review clients with quality peer reviews, as well as sharing valuable information concerning efficient firm operations, upcoming professional pronouncements and other issues the team captain believes will add value to their services. The exit conference is the time to discuss such value added topics, as well as administrative issues, report type, Letter of Comment (LOC) issues and procedures necessary to complete the peer review.

Time management is critical in maximizing value added to the engagement through the exit conference. Team captains should budget field work time to ensure all review procedures are performed and documented, and an effective, value added exit conference is held prior to leaving the field. Holding exit conferences in a timely manner results in maintaining the team captain's professional image, as well as saving time and money for all parties involved. Firms being reviewed should also plan to focus on the review while the reviewer is performing the review to help resolve issues on an ongoing basis.

In order to hold a timely exit conference, the team captain must complete all work papers, all Matters For Further Consideration forms (MFCs) and other related documents. Team captains are most familiar with the specific issues and needs of the reviewed firm immediately following field work. Consequently, during an exit conference held before leaving the field, the team captains are prepared to provide the maximum value added services and to discuss issues. If the exit conference is held later, the team captain must invest additional time to review work papers that may have been prepared several weeks or even months prior to the exit conference.

In order to ensure all the appropriate topics are discussed during the exit conference some team captains use pre-printed agendas that they design. Following is an example of such an agenda:

Exit conference agenda

Discussion of the following matters:

1) Report type

2) Letter of Comments items

3) Items excluded from Letter of Comments

4) Remaining procedures:

a) The report and LOC are:

i) To be provided to the reviewed firm within 30 days of the exit conference.

ii) To be sent, along with an appropriate response, by the reviewed firm to the administering entity within 30 days of the date it receives the report and LOC.

iii) The Letter of Response (LOR) should be addressed to the Peer Review Committee.

iv) The LOR should describe the remedial or corrective actions taken or planned to prevent a recurrence of each deficiency described in the LOC.

v) If the reviewed firm disagrees with one or more of the findings or recommendations in the letter of comments, its response should describe the reasons for such disagreement.

b) The reviewed firm should not publicize the results of the review or distribute copies of the report to its personnel, clients, or others until it has been advised that the report has been accepted by the administering entity.

c) Discuss remaining peer review procedures (i.e., administrative and technical review procedures at TSCPA and presentation to Committee.)

d) Possible follow-up actions

e) State Board Requirements

i) Report

ii) LOC

iii) LOR

iv) Letter of Acceptance (LOA)

5) Instruct the reviewed firm to allow the team captain to review the firm's LOR prior to submission to the administering agency

6) Date of next review

7) Appropriate value added topics

8) Question/Answer Time

9) Conclude the exit conference

The preceding example of an agenda format includes several items the AICPA Peer Review Standards require to be discussed at the exit conference as well as an opportunity to provide value added management information. Discussion of:

When discussing LOC findings during the exit conference, each finding should be supported by an MFC form. The MFC should clearly identify the specific deficiency and the systemic cause of the deficiency. A well-written MFC should supply all the information necessary to write a finding. The team captain should come to a consensus with the firm regarding the MFCs. The exit conference is the time during which all disagreements should be worked out. The reviewed firm should write a brief statement on the MFC indicating their agreement with the MFC and their plans for correcting the deficiency. In the rare instances in which the team captain and the reviewed firm cannot come to an agreement on an MFC, the reviewed firm should write a brief description (on the MFC), which details why they disagree with the MFC.

An MFC should be prepared for each significant deficiency noted during the peer review. All deficiencies including ones not included in the LOC should be discussed during the exit conference. Each MFC that is not included in the LOC should clearly state why it was not included in the LOC. The items discussed during the exit conference that are not significant enough to include in the LOC should be noted on page 4731 of the Summary Review Memorandum - System Reviews, or in a memo that is attached to the SRM.

The administrative matters discussed in item number four of the preceding example agenda are designed to ensure that the firm will provide an LOR to the team captain on a timely basis. The administrative matters also ensure the firm is aware of their responsibilities to submit the report, LOC and LOR to the administering agency on a timely basis. The timely submission of all properly completed workpapers and reports to the administering agency helps ensure the review will go through the technical review and committee approval processes quickly and efficiently. In some instances, questions regarding the review arise during the technical review or committee approval processes. It is to the team captain's advantage for these questions to be resolved while the review is still fresh, rather than having to review work papers that may be several weeks or months old.

As you can see, the team captain can save time, money and energy by:

Additionally, following the guidelines in this article will help ensure that the team captain holds an efficient, value added exit conference. Reviewed firms are more likely to have a favorable impression of the team captain after a successful value added exit conference - the perfect time to ask for referrals from the firm!