Which CPA Firms Are Required To Have Peer Review ?
The AICPA requires a peer review of a CPA firm to be performed every three years where an AICPA individual member is either an owner or an employee (who has been licensed as a CPA for more than two years), if the services performed by such a firm are within the scope of the AICPA’s practice monitoring standards. Most compilation, attest, review, or audit reports fall within the peer review standards. If a CPA firm has clients that create initial or periodic filings with the Securities & Exchange Commission (excluding certain brokers or dealers), then that firm is required to be enrolled in the AICPA Center for Public Company Audit Firms
The CalCPA Society administers the AICPA
The State Boards of Accountancy may also require as a condition of licensure that a firm be peer reviewed. The Alaska Board of Accountancy requires a firm to be peer reviewed if the firm performs reviews and/or audits. The Arizona Board of Accountancy requires peer review if firms perform audits, reviews, and/or compilations with disclosure. The California Board of Accountancy is in the process of considering peer review.
The GAO requires a peer review to be completed (a peer review report has been issued) within three years from the date a firm begins its first audit under generally accepted government auditing standards. Generally audits are performed under these standards if a governmental unit or nonprofit organization expends $500,000 or more in a year in federal awards. In addition state law can require audits of certain governmental units to be performed under government auditing standards, such as California Redevelopment Agencies. Sometimes contracts with state departments, cities, counties or other grantors can require that audits be performed under government auditing standards.
