| Reforming
Peer Review: Full Steam Ahead
JANUARY
2006 - The Society continues to proactively lead the charge
in the effort to reform the current peer review program. Just
last month, the NYSSCPA’s Board of Directors approved
a whitepaper on peer review that completely reexamines the
current program and makes recommendations for reform based
on what peer review should be, not what it is.
Developed
by the Society’s Quality Enhancement Policy Committee
(QEPC), chaired by President-Elect Tom Riley, the whitepaper
represents a major advance in the evolution of peer review.
Through research, discussion, outreach, and hard work, the
QEPC has painstakingly outlined the tenets of an ideal quality
review system that will promote a consistency of quality
throughout the profession upon which the public can rely.
Meaningful
Quality Review
We
will now assess the viability of the framework. An implementation
plan to make peer review consistent with the underlying
concepts of the whitepaper will include member input, and
our Legislative Task Force will include it in our agenda
for the upcoming legislative session in Albany. The paper’s
four main concepts are:
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A quality review system should be progressively
disciplinary, meaning it should be both educational and
disciplinary. The system should emphasize
imparting knowledge to firms without losing sight of the
fact that some firms may lack the will to comply with
high standards without sanction. The disciplinary aspect
becomes active after a firm fails or repeatedly fails
to take corrective action.
-
Quality reviews should be conducted by pooled
teams of individuals from different firms. This
would replace the current firm-on-firm structure and would
allow for an exchange and learning among reviewers and
reviewees. The assignment of qualified individual reviewers,
not firms, out of a pool would obviate potential conflicts
of interest that result from the current program, in which
a firm selects its own reviewer. A pooled team of reviewers
would make issues concerning firm-on-firm reviews or the
rotation of reviewers irrelevant, because a new team would
be constructed for every review. In addition, reviewers
should be systematically trained, certified, and evaluated.
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Peer reviews should be considered part of
a comprehensive quality review process.
This means reviews should take account of elements such
as tone at the top; partner evaluation, promotion, and
assignment of responsibility; independence policies; client
acceptance and retention policies; and selected audit
engagements. Peer reviews should be viewed as only one
aspect of a comprehensive quality review system. Furthermore,
the goal of a quality review should be to ensure that
firms are complying with their own continuous, self-imposed
systems of quality control.
-
The system must be public and open.
This would entail public reporting; comprehensive and
easily accessible guidelines for reviewers; a provision
for feedback and corrective action by the reviewed firm;
a means of referral to a disciplinary body established
by the Board of Regents and the State Education Department;
and documentation of findings and recommendations.
Improving
the Profession and Serving the Public
In
addition to benefiting the public and the professional community,
contributing to this bill will take the Society to the next
level in terms of legislative participation. I encourage
you to share your opinions with me about this initiative,
because the kind of dialogue that helps the Society have
a positive impact on legislation and regulation is also
important to improving the Society.
Louis
Grumet
Publisher, The CPA Journal
Executive Director, NYSSCPA
lgrumet@nysscpa.org
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