NOT THE REAL QUESTION

The article, "Practitioners' Suggestions for Improving Practice Monitoring" appearing in the July issue of The CPA Journal tried to respond to the wrong question. The question to be posed is not what practitioners think about practice monitoring. The question runs to what is the real value of the practice monitoring? This would not be a matter of "feel-good," but a review of the empirical values that were accrued from the review. Did it reduce costs in the CPA firms and, if so, by how much? Did it have any value in reducing the number of malpractice insurance claims and, if so, how can this be proven?

The article suggests that the cost of peer review is a problem and that practitioners wonder if those costs are equal to any savings. This is the nub of the question. Also, there is a suggestion that the review of a practice by an outside CPA has the chance of improving the practice by the input of that person. The problem is that most of the reviewers are in a cottage industry in which peer reviews are the work that they do. Many are no longer involved in general auditing.

Practicing monitoring or quality review parallel continuing professional education and the use of 40 hours per year as the proper number of CPE hours. We have made these decisions based upon sensory reaction rather than upon review of the potential inputs and outputs.

If value of peer review cannot be determined or if the value cannot be measured, then the question arises whether we have made the right choice.

Quality reviews, peer review, and CPE are, in my mind, akin to driver's licensing and training. However, when the need to reduce accidents was evident, enforcement of speeding and drunk driving laws was chosen as the solution. Could we achieve better results by punishing poor practice with rigorous enforcement? Should we consider a procedure that increases the risks of substandard work rather the chosen approach?

Peer review is over 15 years old; quality review nearly 10 years. No one has undertaken a systematic study of the value of these procedures. If there is a value, it should be able to be illustrated, and that is what I am looking for. That is what the professors, with their talents, should turn their attention to.

Jack R. Rogers
Wermer, Rogers, Doran & Ruzon