PEER REVIEW

PEER REVIEW

INTRODUCTION AND DEFINITIONS

The Council of the Institute of Chartered Accountants of India to further enhance the quality of professional work of practising Chartered Accountants and thereby serving the society in the manner envisaged issued a Statement on Peer Review.

Peer Review means an examination and review of the systems and procedures to determine whether they have been put in place by the practice unit for ensuring the quality of attestation services as envisaged and implied/mandated by the Technical Standards and whether these were effective or not during the period under review.

Practice Unit means members in practice, whether practising individually or a firm of Chartered Accountants.

Attestation Services means services involving the auditing or verification of financial transactions, books, accounts or records, or the preparation, verification or certification of financial accounting and related statements as defined under section 2(2)(ii) of the Chartered Accountants Act, 1949. There are certain specific exclusions like Management Consulting Engagements, Representing a client before the Authorities, etc.

Technical Standards mean and include:

·         Accounting, Auditing and Assurance Standards issued by the ICAI;

·         Statements issued by the ICAI;

·         Guidance Notes issued by the ICAI;

·         Notifications/Directions including those of Self Regulatory nature issued by the ICAI; and

·         Various relevant Statutes and/or Regulations which are applicable.

SCOPE OF PEER REVIEW

The peer review process is directed at the attestation services of a practice unit. On selection of a practice unit for peer review, its attestation engagement records pertaining to the 3 completed financial years immediately preceding the selection shall be subjected to review. The records of audit reports/attestation services relating to years prior to the accounting year beginning 01.04.2002 shall not be subjected to review.

The focus during the review exercise will be on :

·         Compliance with Technical Standards;

·         Quality of Reporting;

·         Office systems and procedures with regard to compliance of attestation services systems and procedures; and

·         Training Programmes for staff concerned with attestation functions, including appropriate infrastructure.

MEMBERS/FIRMs (PRACTICE UNIT) SUBJECT TO REVIEW

All practice units on the basis of random selections are to be subjected to Peer Review.

OBLIGATIONS OF THE PRACTICE UNIT

Any person from the practice unit shall provide access to any record or document required by the reviewer, which the reviewer reasonably believes to be of relevance to the peer review conducted.

REPORT OF THE REVIEWER

·         Preliminary Report

The reviewer before making his report to the Peer Review Board, communicate a preliminary report to the practice unit. The reviewer shall report the areas where systems and procedures were deficient or where non-compliance with reference to any other matter has been noticed by him. The practice unit shall make its submissions or written representations, in writing to the reviewer within 21 days of its receiving the preliminary report .

·         Interim Report

The reviewer on receiving satisfactory reply from the practice unit shall submit an appropriate Report to the Board. In case the reviewer is not satisfied with the reply of the practice unit, the reviewer shall accordingly submit his Interim Report to the Board.

On receiving a report from a reviewer, the Board, having regard to the Report and any submissions or representations attached to it , may make recommendations to the practice unit concerned regarding the application of Technical Standards, regarding further improvements that could be made to internal quality systems.

A further follow up review as regards the areas for improvement recommended with specific instructions will be carried out and implementation of the recommendations will be examined during the follow up review.

·         Final Report

The reviewer will prepare a final Report to the Board (The Reviewer’s Report), incorporating the findings as discussed with the practice unit.

The Board may then issue within 15 days from the date of it's decision with regard to the issuance Peer Review Certificate to the practice unit.