Maryland begins participation in peer review 'Facilitated State Board Access' process

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These resources offer further details about FSBA and peer review.

TOWSON, Sept. 26, 2008 -- Maryland is participating in early adoption of the American Institute of CPAs' peer review Facilitated State Board Access (FSBA).

As an early adopter, Maryland is helping to ensure a smooth transition to national implementation.

What is Facilitated State Board Access?

Since its inception in 1988, the peer review program has continued to evolve to keep up with changes in the business and regulatory environments. The AICPA Facilitated State Board Access is the next step in this evolution.

After carefully evaluating the various options, stakeholders determined that the best way to address the user demands for greater peer review transparency, while considering member and state CPA society concerns, was to use the existing peer review process to facilitate the voluntary disclosure of peer review results to state boards of accountancy (BOAs). The intent of this new process is to create a nationally uniform system through which CPA firms can satisfy state board peer review information submission requirements, increase transparency and retain control over their peer review results.

The AICPA and CPA state societies are working together to allow this process to become the primary means by which all BOAs obtain peer review results. Over time, this new process will help to make submission of your firm’s peer review information easier. However, until our national goal is reached, this new process WILL NOT replace the current peer review information submission requirements of the Maryland State Board of Public Accountancy, which licenses firms practicing in Maryland. Therefore, firms will need to follow the current Maryland State Board of Public Accountancy requirements until notified differently.

By participating in the FSBA process, we are helping to ensure a smooth transition and full national implementation, which is expected to occur in May 2009 in connection with the acceptance of new peer review reports issued under the revised AICPA Standards for Performing and Reporting on Peer Reviews (Standards).

Maryland will begin the FSBA process with reviews accepted at the Oct. 13, 2008 report acceptance body (RAB) meeting.

What this means for your firm

FSBA uses an opt-out process that allows peer review results to be made available to select BOAs on a voluntary firm basis, using a secure, BOA access-only Web site. Firms with their main office located in Maryland will receive an additional notice and instructions along with their next peer review acceptance letter that notifies them of the Administering Entity’s (AE) intent to post their peer review information to the secure BOA access-only Web site. For firms whose main office is located in Maryland, their peer review administering entity (AE) is the Maryland Association of CPAs. Firms that are not members of the AICPA Employee Benefit Plan Audit Quality Center, Governmental Audit Quality Center or Private Companies Practice Section will be given an opportunity to opt out of the process.

Below are the details of how the new process will work.

How the process will work

In Maryland, the process will entail the following:

Making peer review results available to select BOAs on a voluntary firm basis, using a secure, BOA access-only Web site that will be available only to authorized state board representatives. The Maryland Association of CPAs will post applicable peer review information related to a firm’s most recently accepted review to this secure BOA web site unless the firm requests that its information be excluded. The firm will be notified by the Maryland Association of CPAs, via a notice included with the firm’s peer review acceptance letter, of its intention to post the firm’s peer review results and the firm will have 30 days to opt out of the process.
Once the Maryland Association of CPAs posts the information, the firm’s managing partner and peer review contact will receive a confirmation via e-mail (or regular mail if e-mail is not available) informing them that the results have been posted to the site and a reminder that the firm has 30 days from the date of the acceptance letter to opt-out of the process. The e-mail also provides the partner and peer review contact the opportunity to make the firm’s results available to additional select BOAs.

After 30 days, if the firm does not opt out, the firm’s peer review results will be available to authorized BOA representatives via a secure BOA Web site. It is anticipated that this option will be beneficial, over time, to firms with multi-state practices.

“Firms can request that their results be made available to more than one BOA,” added Jim Brackens, AICPA vice president of firm quality and practice monitoring. “However, results will only be posted for availability to BOAs that require peer review and are not prohibited from obtaining access to peer review information.”

During early adoption, access will be limited only to those BOAs that participated in the pilot program or are participating in early adoption.

For more information on expanded access please refer to these frequently asked questions.

Firms that are not members of the AICPA Employee Benefit Plan Audit Quality Center, Governmental Audit Quality Center or Private Companies Practice Section will have the opportunity to opt out even after their information has been posted by notifying the Maryland Association of CPAs in writing. Once the notification is received, the Maryland Association of CPAs will remove the posted information. Firms that opt out will have certain information (which is currently publicly available) posted to the secure BOA access-only Web site. This information will help us to maintain a complete database of all firms in the peer review program.

Peer review promotes firm quality

The AICPA Peer Review Program is dedicated to enhancing the quality of accounting, auditing and attestation services. Peer review began in the early 1960s, when large firms used it as a way to make certain their different offices maintained consistent standards. The program produced tangible results and was later expanded to firms of all sizes. Since AICPA members adopted peer review as a membership requirement in 1988, the AICPA Peer Review Program has helped thousands of firms monitor and continually improve their accounting and auditing practices.

For more information on peer review transparency or the AICPA’s Peer Review Program and FSBA, go to www.aicpa.org/Professional+Resources/Peer+Review/.

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