Magazine article The CPA Journal

Perceptions of Peer and Quality Review

Magazine article The CPA Journal

Perceptions of Peer and Quality Review

Article excerpt

In October 1994, the AICPA Council approved the combination of the PCPS Peer Review Program with the Quality Review Program effective April 1995. The new program is called the "AICPA Peer Review Program." This combination should eliminate confusion among members of the AICPA and the general public caused by having two similar but separate programs in operation. Numerous articles have been written about the benefits of, and how to prepare for, a review. Little research has been conducted to determine the attitudes of CPAs toward peer or quality review. This raises a question. Are the two groups compatible in their perceptions and attitudes regarding quality review/peer review (QR/PR)? The results of this study will help answer that question.

Demographic Information

In July 1993, questionnaires were mailed to 1,500 Colorado CPA firms enrolled in any of the three practice monitoring programs (SECPS, PCPS, or QR). The questionnaire was directed to the person responsible for quality control and review. Four hundred thirty-seven usable responses were received from firms that either had quality review or peer review. Thirty-four (7.8%) of the respondents participated in the SECPS, 85 (19.4%) in the PCPS, and 318 (72.8%) in the QR monitoring programs.

Practitioner Responses

Procedures. Responses were compared between practitioners enrolled in the PCPS PR program and those enrolled in the AICPA QR program. The areas analyzed are 1) QR/PR in general and 2) the extent of perceived improvement in overcoming certain engagement deficiencies.

Attitudes About Quality Review.

Table 1 summarizes practitioner attitudes about quality review. (Table 1 omitted) Responses are reported in three categories: disagree, not sure, and agree.

Practitioners in both groups agree on the direction that QR/PR should take in the future. The largest percentage of each group agrees that the timing of a QR/PR (once every three years) is appropriate, and that QR/PR should be continued. Respondents in both groups disagree that QR/PR should be extended to either management consulting services or tax services or that QR/PR should be legislated as a requirement for all CPA firms.

Agreement on whether or not QR/PR has improved performance is not as strong. Both groups disagree that the QR/PR program has helped them develop closer ties with other CPAs. Both groups also disagree that QR/PR has helped their firms focus on future direction. The largest percentage of each group agrees that their firms' practice has improved as a result of their reviews. There seems to be a slight difference of opinion on whether meeting the QR/PR requirements has caused the skills, expertise of firm personnel, and internal inspection programs to improve. A slightly larger percentage of QR respondents disagree, whereas a substantially larger percentage of PCPS respondents agree. These differences of opinion might be explained, in part, by the fact that most QR firms had only completed one review.

Practitioners' perceptions about whether or not QR/PR has affected the image or ability of their firms to compete a related to public awareness of a firm's QR/PR status. A larger percentage of both groups disagree that the QR/PR program 1) has enhanced the professional image of their firms, 2) has provided recognition and credibility to small firms, or 3) has affected the firm's ability to bid competitively. …

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