Journey through a peer review – forms to prep for field work

Part 4 of my journey through the peer review process for this cycle.

Well, after signing an engagement letter with the reviewing firm I need to get the initial round of checklists completed.

List of engagements

My peer review year ends May 31. This weekend I accumulated a list of completed engagements for clients whose fiscal year ended within my peer review year. That means I listed my clients whose fiscal year ended between in June 2011 and May 2012. Not when I issued the reports, but the client’s year-end. 

The form requires listing the name or some code to identify the client, their fiscal year-end, type of services, partner (obviously me) and approximate hours for that service. That doesn’t include any tax hours, consulting, or quarterly comps with annual work.  The form also calls for identifying new engagements.

My reviewer will use that list to make selections for the peer review. When he has done so, he will send me the list of what he wants to look at. I will fill out a short checklist describing the engagement and send that checklist along with a copy of the financial statements to him before the field work.

Surprise engagement

He will withhold the name of one engagement until the day he arrives. This is called the surprise engagement.

The concept here is if a firm is foolish enough to “clean up the files” the surprise engagement would still identify the quality problems.  In addition, there will probably be dramatic quality differences between a surprise engagement and all of the others. The reviewer and state Peer Review COmmittee won’t be able to do anything about that, but it will probably increase their skepticism.

Managing partner interview

This form addresses a lot of the general quality control issues. This is a relatively short form. 

It essentially addresses the tone at the top. You can find that form here, if you want to look at it.

Quality-control questionnaire

This form looks like a bruiser – it has 21 pages of questions. However, there is lots of space to add comments.  The purpose behind many of the questions is explained, which adds to the length.

This form covers the specific components of quality control. It provides a framework for a structured conversation and evaluation of how the firm is addressing each of those components.

The form for a sole practitioner with no staff is here.

The form for a firm with two or more personnel is here.

Time involved.

It took me a little over two hours to accumulate the list of engagements and complete the two forms.

I already have a good working knowledge of the forms so I was able to complete them faster than a CPA who hasn’t seen the form before, or at least hasn’t seen them since the prior review three years earlier.

You can adjust my time however you want in order to estimate how long it will take you.

Next step

I will wait for a list of the selected engagements. Then I’ll prep the checklist for each engagement and send it to the reviewer. Then I’ll wait for field work.