Current through Reg. 49, No. 38; September 20, 2024
(a) The board shall
retain the Peer Review Oversight Board (PROB) for the purpose of:
(1) monitoring sponsoring organizations to
provide reasonable assurance that peer reviews are being conducted and reported
in accordance with the Standards promulgated by the AICPA Peer Review
Board;
(2) reviewing the policies
and procedures of sponsoring organization applicants as to their conformity
with the peer review standards; and
(3) reporting to the board on the conclusions
and recommendations reached as a result of performing the functions in
paragraphs (1) and (2) of this subsection.
(b) Information concerning a specific firm or
reviewer obtained by the PROB during oversight activities shall be
confidential, and the firm's or reviewer's identity shall not be reported to
the board. Reports submitted to the board will not contain information
concerning specific firms or reviewers. Members of the PROB will be required to
execute a confidentiality statement for the sponsoring organization which they
oversee.
(c) The PROB shall consist
of active licensed Texas CPAs in a number sufficient to meet the objectives of
this section as determined by the board. No member of the PROB shall be a
current member of the board or one of its committees, the TXCPA's Peer Review
or Professional Conduct Committee, or the AICPA Professional Ethics Executive
Committees or Peer Review Board (including subcommittees). The members should
have extensive experience in accounting and auditing and in the practice of
public accountancy at the partner (or equivalent) level within the past five
years. If a member is associated with a firm subject to peer review, the
member's firm must have received a report with a rating of pass from its last
peer review. Compensation of PROB members shall be set by the board.
(d) The PROB shall make an annual
recommendation to the board as to the qualifications of an approved sponsoring
organization to continue as an approved sponsoring organization on the basis of
the results of the following procedures:
(1)
Where the sponsoring organization is the AICPA/NPRC, state CPA societies other
than Texas that are fully involved in the administering AICPA Peer Review
Program, PROB shall review the published oversight reports of those entities or
successors, to determine that there is an acceptable level of
oversight;
(2) Where the sponsoring
organization is other than those listed in paragraph (1) of this subsection,
PROB shall perform the following functions:
(A) At least one member of the PROB shall
attend all meetings of each sponsoring organization's PRRC. Certain PRRC
meetings may be conducted via telephone or video conference. In those
instances, the PROB may join the conference call.
(B) During such visits, the PROB shall:
(i) meet with the organization's peer review
committee during the committee's consideration of peer review
documents;
(ii) evaluate the
organization's procedures for administering the peer review program;
(iii) examine, on the basis of a random
selection or other criteria adopted by PROB, a number of reviews performed by
the organization to include, at a minimum, a review of the report on the peer
review, the firm's response to the matters discussed, the sponsoring
organization's FLOA outlining any additional corrective or monitoring
procedures, and the required technical documentation maintained by the
sponsoring organization on the selected reviews; and
(iv) expand the examination of peer review
documents if significant deficiencies, problems, or inconsistencies are
encountered during the analysis of the materials.
(e) In the evaluation of
policies and procedures of sponsoring organization applicants, the PROB shall:
(1) examine the policies as drafted by the
applicant to determine that they will provide reasonable assurance of
conforming with the standards for peer reviews;
(2) evaluate the procedures proposed by the
applicant to determine that:
(A) assigned
reviewers are appropriately qualified to perform the review for the specific
firm;
(B) reviewers are provided
with appropriate materials;
(C) the
applicant has provided for consulting with the reviewers on problems arising
during the review and that specified occurrences requiring consultation are
outlined;
(D) the applicant has
provided for the assessment of the results of the review; and
(E) the applicant has provided for an
independent report acceptance body that considers and accepts the reports of
the review and requires corrective actions by firms with significant
deficiencies;
(3) make
recommendations to the board as to approval of the applicant as a sponsoring
organization.
(f)
Annually the PROB shall provide the board's Peer Review Committee with a report
on the continued reliance of sponsoring organizations' peer reviews. The PROB
report shall provide reasonable assurance that peer reviews are being conducted
and reported on consistently and in accordance with the Standards promulgated
by the AICPA Peer Review Board. A summary of oversight visits shall be included
with the annual report.
