Louisiana Administrative Code
Title 46 - PROFESSIONAL AND OCCUPATIONAL STANDARDS
Part XIX - Certified Public Accountants
Chapter 15 - Firm Permits to Practice; Attest Experience; Peer Review
Section XIX-1503 - Peer Review and Practice Monitoring Programs
Universal Citation: LA Admin Code XIX-1503
Current through Register Vol. 50, No. 9, September 20, 2024
A. The board hereby requires firms that provide attest services, excluding engagements subject to a permanent inspection program of the Public Company Accounting Oversight Board, to participate in an approved peer review program enumerated in R.S. 37:77(G)(2)(a)(i), (ii), and (iii), and comply with the applicable requirements of that program. The purpose of this requirement is to improve the quality of financial reporting and to assure that the public can rely on the fairness of presentation of financial information on which CPA firms issue reports.
1. Each licensee or CPA firm, which
performs attest services in Louisiana, shall at its own expense undergo and
complete a peer review that has been accepted by the administering entity at
least once each three years, and have its initial peer review in accordance
with standards not less stringent than the American Institute of Certified
Public Accountants (AICPA) Standards for Performing and Reporting on Peer
Reviews.
2. Peer reviews shall be
administered by the Society of Louisiana Certified Public Accountants (LCPA) or
by another board approved administering entity or sponsoring organization, such
as, a state society of CPAs, the National Peer Review Committee, or state board
of accountancy program with standards substantially equivalent to the AICPA's
standards.
3. Peer review programs
must be approved by the board and conducted pursuant to standards not less
stringent than standards applied by the AICPA and may be subject to the
following:
a. evaluations by the board or its
designee that assess the effectiveness of the peer review program under its
charge;
b. notifying the board of
the participation of firms enrolled in the peer review program and dates of the
firm's most recently accepted peer reviews;
c. notifying the board of a firm's failure to
cooperate or otherwise fulfilling the requirements of the peer review program,
or of a firm's withdrawal, removal, or other termination from enrollment in the
program.
4. Peer review
reports shall be made available to the board after a reviews acceptance date by
the administering entity or its peer review committee. "Acceptance" shall be as
described in the AICPA peer review standards and its interpretations. Timely
completion of peer reviews and submission of, or making available reports, in
the manner and periods required under this Section, are conditions of holding a
valid permit.
a. For reviews commencing on or
after January 1, 2009 and administered by the Society of Louisiana CPAs, peer
review reports shall be made available or submitted to the board by the
administering entity by making them available on a secure website or other
secure means. Such reports must be made available within 45 days of the
acceptance date.
b. For reviews
administered by another board approved administering entity or sponsoring
organization, such as, a state society of CPAs, National Peer Review Committee,
or state board of accountancy program with standards substantially equivalent
to the AICPA's standards, peer review reports shall be submitted to the board
by the firm directly or made available or submitted to the board by the
sponsoring organization or administering entity by making them available on a
secure website or other secure means. Such reports must be submitted or made
available within 45 days of the acceptance date.
5. The reviewed firm must retain any or all
of the documents related to the peer review in accordance with AICPA peer
review standards. Upon request of the board, the reviewed firm shall timely
submit such documentation to the board.
6. The objective of this reporting rule is
primarily to reinforce the boards efforts to ensure that only appropriately
qualified CPA firms are engaged in the offering and rendering of attest
services subject to peer review.
7.
For good cause shown, the board may grant or renew permits for a reasonable
period of time pending the completion of a peer review or the submission of a
report thereon.
B. Practice Monitoring Program
1. A reviewer(s)
designated, employed, or engaged by the board will conduct a periodic review of
peer review reports that are made available to the board. Such reviewer(s) will
determine whether peer reviews are being properly submitted or made available
to the board; will assess the significance of any reported or disclosed
failures or deficiencies in complying with professional standards; will
communicate with the reviewed firms as may be deemed necessary; will consider
making referrals to the board of cases requiring further investigation by the
board or its designees; and, will perform such other functions as the board may
assign to its designees.
2. The
reviewer or board designee may disclose, use, introduce, or testify with
respect to information or records obtained or reviewed in connection with the
practice monitoring program which are relevant in a proceeding before the board
pursuant to
R.S.
37:79, 80, 81 or 84.
3. Based upon the results of practice
monitoring or additional investigations, the board may consider, by
administrative hearing or by consent, corrective actions such as probation,
suspension, practice limits or restrictions, additional continuing education,
pre-issuance reviews, more frequent peer reviews, and other measures, including
discipline against the reviewed firm and any individual licensees employed or
contracted by the reviewed firm.
C. Confidentiality. Peer review reports and documents submitted to the board pursuant to this Section and comments of reviewers and of the board on such reports or attest documentation relating thereto shall be maintained in confidence, except that they may be communicated by the board, or its designees, to the licensees who issued the reports and as may be allowed under R.S. 37:77(H).
D. No CPA or CPA firm shall be required to become a member of any organization in order to comply with the provisions of §1503
E. Peer Review Oversight Committee (PROC)
1. The board shall appoint a
Peer Review Oversight Committee (PROC) whose function shall be the oversight
and monitoring of sponsoring organizations for compliance and implementation of
the minimum standards for performing and reporting on peer reviews. The PROC
shall consist of up to three members, none of whom are current members of the
Board of Certified Public Accountants of Louisiana. These members shall be a
licensee holding an active CPA certificate in good standing, and possess
accounting and/or attest experience deemed sufficient by the board.
2. Responsibilities. At least one member of
the PROC will attend all meetings of the Society of Louisiana Certified Public
Accountants Peer Review Committee (PRC), or any successor thereof, and report
periodically to the board on whether the PRC is meeting the requirements of
these rules.
3. Compensation.
Compensation of PROC members shall be set by the board.
4. Duties of the PROC:
a. observe the plenary sessions of the PRC
which include the assignment of reviews to committee members and the summary
meeting where the conclusions of the review committee members are
discussed;
b. may periodically
review files of the reviewers; and
c. may observe the deliberations of the PRC
and report their observations to the board; and
d. make recommendations relative to the
operation of the program; and
e.
consider such other matters and perform such other duties regarding the peer
review programs as may be necessary from time to time;
f. members of the Peer Review Oversight
Committee must sign a confidentiality agreement with the administering entity
annually.
AUTHORITY NOTE: Promulgated in accordance with R.S. 37:71 et seq.
Disclaimer: These regulations may not be the most recent version. Louisiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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