Peer REVIEW PREP TIPS


These are basic areas we have often found missing and/or the peer review committees are suggesting more review concentration.
The items below are NOT a substitute or intended to be considered third party practice aids.
The list has NOT been peer reviewed nor are they a complete list of steps needed to properly perform an Accounting or Auditing Engagement.
 
For the Firm
Make sure your QCPP (Quality Control Policy & Procedures) Document is up-to-date.
Use the Peer Review checklist  4500 & 4550 or   4600 & 4650 as an aid-it is helpful.
Make sure your annual inspection report includes testing/discussion about all six sections of your QCPP document
Yearly have written documentation of independence for all those that participate in any A&A (Auditing & Accounting) engagements.
Have written documentation all staff (including partners) acknowledges receiving the QCPP document, AICPA Code of Conduct, Firms Acceptance and Continuing Policies.
Make sure you have done your annual inspection and documented any findings and corrective actions.

For ALL types of A&A engagements, make sure you are CONSISTENT with the titles of your financial statements - Starting with the Engagement Letter, Management Representation Letter, CPA Report, .....   and that your report is signed by some means.
For ALL types of A&A engagements, make sure your dates are correct- Engagement Driven - Not Compliance Driven(after the fact)
 
For Audits
Document your audit planning / brainstorming
Incorporate planning with initial analytical procedures-Find and Document Expectations. Document Final analytical procedures meet expectations.
Document the consideration of Significant Estimates
Document the inherent & control risks and how you are going to possibly change your audit procedures to overcome those risks.
        IMPORTANT: Risk assessment by class transactions are to support  the Assertions - What steps are you doing to support EACH Assertions.
Develop Materiality level guidelines for Revenue, Expenses, Assets, Equity,....
Document the Fraud Discussion
Document the consideration of Going Concern
Document examination of Subsequent Events
Document the consideration of any Concentration Risks
Document the consideration of any Related Party issues
Non-Profits -Adopt ASU 2016-14 Combine Temp/Permanent Funds, Notes on Programs Liquidity, Allocation of G&A to functions 
Apply ASC 842 Leasing Rules to GAAP Financials and Footnotes-Right of Use Assets-Lease Liabilities
Revenue Recognition ASC 606-Contract Revenue- Documentation, Financials and Footnotes
CECL-Current Expected Credit Loss- ASU 2016-13-Documentation for Allowance
Disaggregated Income/Expense  -Put Info in Notes- Such as Point in Time/Overtime,   Products, Services, Locations, Type of Customer.
Document your review and findings of YE JEs, Cutoff testing, VIE, Tax/Compliance issues
Document why you did or did not do something like – Cash Confirmation-AR Confirmation
Document Understanding of Internal Control
  1. Detail the significant class transaction- procedures
  2. Of those procedures-highlight the internal control in place- How does that support the Assertions for the transaction class.
  3. Consider any control that might be missing
  4. For each transaction class document the inherent & control risk- What audit procedures are you doing to overcome those risks.
  5. Do walk through
  6. Document client’s accounting knowledge/skill to accept or prepare the financial statement

For Reviews
Analytics should include (if applicable):
Comparison of Prior Years (Comparison alone will NOT be adequate Analytics- MUST develop expectation)
Comment on Review of General Ledger – current and subsequent
Use of ratios and analytics for common elements-  Example:  Sales to Labor, industry standards
Develop real expectations – explain why they were or were not met
Expectations must be quantified - Dollar expectations not just percentages. 
Consider plausible relationships of financial to non-financial information
Economic environment, Gov’t regulations, EPA, ...
Compare Dis-aggregated Revenue Date if applicable
Reports of Financial Statement for Subsidiaries or Investees
SSARS#23 Use of the word ‘responsibility” for supporting schedules on the report
MUST document your conclusion the financials meet your expectations



For Compilations
All TITLES to the financials MUST be the same- on the engagement letter, report and financials.
The engagement letter MUST be tailored to what the compilation report reported. (Each item in the Financials, Notes, Supplemental Info,...)
SSARS#23 Use of the word ‘responsibility” for supporting schedules on the report
You still have to follow all financial reporting issues such as 'current portion of long-term liability'.

For Preparations.
The wording - 'no assurance is provide with these financials' (or similar) must be on financials or report.
An engagement letter is still required - tailored to what the preparation financials report. (Each item in the Financials, Notes, Supplemental Info,...)