What is Peer Review?
The bylaws of the American Institute of Certified Public Accountants (AICPA) include a requirement that all members engaged in the practice of public accounting be practicing in a CPA firm enrolled in an AICPA practice-monitoring program if the services performed by the firm are within the scope of the practice-monitoring standards and the firm issues reports purporting to be in accordance with the AICPA professional standards. The practice-monitoring programs are intended to reduce substandard performance by CPA firms in their delivery of accounting and auditing services. This is being accomplished by AICPA's Peer Review Program. This program requires that the CPA firm maintain a quality control system which is broadly defined as a process to provide the firm with reasonable assurance that its personnel comply with applicable professional standards and the firm's standard of quality.
The AICPA Peer Review Program requires that once every three years the CPA firm submit to a review of its accounting and auditing practice by independent CPA's (peers) using guidelines and procedures established by the AICPA. The peer review focuses on the professional aspects of the reviewed firm's accounting and auditing practice. The independent peer review team performs an on-site review of the CPA firm's quality control system as well as the work performed on selected engagements and the financial statements and reports that were issued on these engagements.
Sheehan & Company has been a member of the Peer Review Program since its inception and has achieved outstanding results. Sheehan & Company's most recent peer review was completed in December of 2013. The peer review report, dated December 9, 2013, indicated a peer review rating of "pass". A rating of "pass" is the most desirable rating resulting from a peer review as this indicates that no deficiencies were found in the firm's quality control system and that there is reasonable assurance that the firm's accounting and auditing practice complies with professional standards. Firms can receive a rating of pass, pass with deficiency(ies), or fail.