The Update Integrates Quality Management Standards into the Peer Review Process
NEW YORK (Dec. 19, 2024) – A new American Institute of CPAs standards update that aligns the peer review process with quality management requirements is now live on the AICPA’s website.
The AICPA Peer Review Board voted in November to approve Peer Review Standards Update (PRSU) No. 2, which aligns peer review standards with new quality management standards that go into effect late next year. The update also clarifies and improves existing technical guidance.
Almost every firm that performs accounting or auditing work is required to undergo a peer review, which is a review of selected engagements to determine if it was compliant with professional standards or, if applicable, an evaluation of the firm’s system of quality control, which includes a review of selected accounting and auditing engagements.
Accounting firms have until Dec. 15, 2025, to adopt a quality management system in accordance with AICPA standards. For firms subject to peer review, the quality management related provisions of PRSU No. 2 are effective for peer review years ending on or after Dec 31, 2025.
Some of the changes in PRSU No. 2 include:
Peer review terminology and phrasing revisions as necessary to conform with the new QM standards.
Requirements and related application and other explanatory material paragraphs were adapted, where appropriate, to address risk-based considerations resulting from the requirements of the quality management standards.
Technical changes intended to meet the current needs of the program by clarifying or expanding the existing requirements and application and other explanatory material were made to continue the Peer Review Boards's effort to maintain standards that are easy to read, understand, and apply.
More information about AICPA’s peer review program can be found on the organization’s website.