Current through Bulletin 2024-24, December 15, 2024
(1)
(a) Under Subsections 58-1-308(3)(b) and
58-26a-303(2)(b), there is created a peer review requirement as a condition for
renewal of licenses issued under Title 58, Chapter 26a, Certified Public
Accountant Licensing Act, providing for review of the work products of CPA and
CPA firm licensees.
(b) The purpose
of the peer review is to monitor compliance with professional
standards.
(c) The peer review
shall emphasize education and may include other remedial actions when
non-compliance is found.
(d) If a
licensee is unwilling or unable to comply with or intentionally disregards
professional standards, the administering organization shall refer the matter
to the Division for consultation and determination of appropriate
action.
(2)
(a) A firm's initial peer review shall be
assigned a due date to require that the initial review be started no later than
18 months after the date of the issuance of its initial report as defined in
Subsection 58-26a-102(20).
(b) At
least once every three years a firm engaged in the practice of public
accounting shall undergo, at its own expense, a peer review commensurate in
scope with its practice.
(c) The
administering organization shall assign the year of review.
(d) A portion of the peer review may be
performed by a regulatory body if the Board approves the regulatory body as an
administering organization. This does not by itself satisfy the peer review
requirement unless the other standards in this rule are fulfilled by the
regulatory body.
(3) A
firm scheduled for peer review shall engage a reviewer qualified to conduct the
peer review. Regulatory bodies shall assign inspectors.
(4)
(a) A
peer reviewer shall provide evidence of one of the two following minimum
qualifications to the administering organization:
(i) acceptance as a peer reviewer by the
AICPA; or
(ii) compliance with the
qualifications required by the AICPA to qualify as a peer reviewer.
(b) A peer reviewer shall be
licensed or hold a permit to practice as a CPA in Utah or another state or
jurisdiction of the United States.
(c) The administering organization shall
approve reviewers for reviews not administered by the AICPA.
(d) Regulatory bodies shall determine the
qualifications of inspectors.
(5)
(a)
Each peer review shall be conducted according to the Standards for Performing
and Reporting on Peer Reviews promulgated by the AICPA, effective June 1, 2023,
which are incorporated by reference and adopted as the minimum standards for
peer reviews of firms. This requirement does not require any firm or licensee
to become a member of the AICPA or any administering organization.
(b) The Board may review the standards used
by the regulatory body to determine if those standards are sufficient to
satisfy all or part of the peer review requirements, or what additional review
may be required to meet the peer review requirements under this rule.
(6) If an administering
organization finds that a peer review was not performed in accordance with this
rule or the peer review results in a pass with deficiencies or fail report, the
Peer Review Committee may require remedial action to assure that the review or
performance of the CPA or CPA firm being reviewed meets the objectives of the
peer review program.
(7)
(a) For a multi-state firm, the Division may
accept a peer review based solely upon work conducted outside of this state as
satisfying the requirement to undergo peer review under this rule, if:
(i) the peer review is conducted during the
year scheduled or rescheduled under Subsection R156-26a-303a(2);
(ii) the peer review is performed in
accordance with requirements equivalent to those of this state;
(iii) the peer review:
(A) studies, evaluates, and reports on the
quality control system of the firm as a whole in the case of system reviews;
or
(B) results in an evaluation and
report on selected engagements in the case of engagement reviews;
(iv) the firm's internal
inspection procedures require that the firm's personnel from another office
outside the state perform the inspection of the office located in this state
not less than once in each three year period; and
(v) at the conclusion of the peer review, the
peer reviewer issues a report equivalent to that required by Subsection
R156-26a-303a(5) or in the case of an approved regulatory body, a report is
issued under their standards.
(b) A multi-state firm seeking approval under
Subsection R156-26a-303a(7)(a) shall submit an application to the administering
organization by February 1 of the year of review establishing that the peer
review it proposes to undergo meets the requirements of Subsection
R156-26a-303a(5).
(8) A
firm that does not perform services encompassed in the scope of minimum
standards as set out in Subsection R156-26a-303a(5)(a) or (b) is exempt from
peer review and shall notify the Division of the exemption at the time of
renewal of its registration. A firm that begins providing these services shall
begin a peer review within 18 months of the date of the issuance of its initial
report as defined in Subsection 58-26a-102(16).
(9)
(a) If
two or more firms are merged or sold and combined, the surviving firm shall
retain the year of review of the largest firm.
(b) Dissolutions or separations: If a firm is
divided, the new firms shall retain the year of review of the former firm. If
this period is less than 12 months, a new year shall be assigned so that the
review occurs after 12 months of operation.
(c) Upon application to the administering
organization and a showing of hardship caused solely by compliance with
Subsection R156-26a-303a(10), the Division may authorize a change in a firm's
year of review.
(10) If a
firm can demonstrate that the time established for the conduct of a peer review
will create an unreasonable hardship upon the firm, the Division may approve an
extension not to exceed 180 days from the date the peer review was originally
scheduled, as follows:
(a) A request for
extension shall be addressed in writing by the firm to the Division with a copy
to the administering organization responsible for administration of that firm's
peer review.
(b) The written
request for extension shall be received by both the Division and the
administering organization at least 30 days before the date of scheduled review
or the request will not be considered.
(c) The Division shall inform the
administering organization of the approval of any extension.
(11)
(a) Documentation necessary to establish that
each peer review was performed in conformity with peer review standards adopted
by the Board, including the peer review working papers, the peer review report,
comment letters and related correspondence indicating the firm's concurrence or
nonconcurrence, and any proposed remedial actions and related implementation,
shall be retained for the relevant administering organization's designated
retention period or 120 days, whichever is longer.
(12)
(a)
Costs associated with firm-on-firm reviews will be negotiated between the firm
and the reviewer and paid directly to the reviewer. Costs associated with
committee assigned review team (CART) reviews will be set by the administering
organization. The administering organization will collect the fees associated
with CART reviews and pay the reviewer.
(b) Costs associated with the administration
of the review process shall be paid from fees charged to the firms. The fees
shall be collected by the administering organization. The schedule of fees
shall be included in the administering organization's proposal. The fee
schedule shall specify how much is to be paid each year and shall be based on
the firm size.
(13)
Financial statements, working papers, or other documents reviewed are
confidential. Access to those documents shall be limited to being made
available, upon request, to the Peer Review Committee or the technical reviewer
to assure that peer reviews are performed according to professional
standards.
