SCOPE OF PEER REVIEW

The peer review process is directed at the attestation services of a practice unit with focus on:

➢ Compliance with technical standards.

➢ Quality of reporting.

➢ Office systems and procedures

➢ Training programmes for staff concerned including appropriate infrastructure.

Period to be covered under Review: As far as the scope of work is concerned, attestation engagement records pertaining to the immediately preceding three completed financial years be subjected to review. Records pertaining to years prior to the accounting year beginning on 1.04.2002 shall not be subjected to review.

FRAMEWORK FOR CONDUCTING PEER REVIEW

The methodology for conducting peer reviews can be divided in three distinct stages, viz. Planning, Execution and Reporting.

Planning would involve the following steps:

➢  Notification in writing to practice unit by the Board alongwith a questionnaire for completion together with a panel of three suggested names of Reviewers.

➢ Time period of 15 days’ allowed to practice unit for selecting the Reviewer.

➢ Return the completed questionnaire to Reviewer within one month of its receipt alongwith a complete list of attestation service.

➢ Selection of initial sample by the Reviewer out of complete attestation services client list and

informing the practice unit about two weeks in advance to keep relevant records ready.

➢ Confirmation of on-site visit in consultation with practice unit in a manner so that review is conducted within four months of notification.

Execution Stage involves different steps as under:

➢ On-site review will be conducted at the practice unit’s head office or other officially noted /recorded place of office within four months of notification.

➢ Initial meeting between the Reviewer and a designated partner to conduct a preliminary evaluation and to confirm responses given in the questionnaire.

➢ Compliance review of the general controls to select the attestation services engagements to be

reviewed.

Five key controls are: independence, maintenance of professional skills and standards,

outside consultation, staff supervision and development and office administration.

➢ Determination of number of attestation services engagements to be reviewed would depend upon factors such as number of practising members; the degree of reliance placed, if any, on general quality controls; and the total number of attestation services engagements undertaken by the practice units for the period under review.

➢ Following compliance approach or substantive approach or a combination of both in the review

of attestation services engagement records. Compliance approach would involve assessment

of control procedures in accordance with six key controls, viz, .Audit Record Administration,

Review and Evaluation of System of Internal controls, Financial Statements Presentation,

Substantive Tests, Audit conclusion, Audit Report.

Substantive approach would require a review of the attestation working papers in order

to establish whether the attestation work has been carried out as per norms of Technical Standard.

➢ On-site review may take at least a day but in any case would not exceed seven working days.

Reporting involves following distinct stages:

➢Communicate a preliminary report at the end of on-site review. Name of any individual shall not be mentioned in the report. 21 days’ time allowed to practice unit to make any representation on the report.

➢Submission of final report by Reviewer to the Board in case the Reviewer is satisfied with the replies received from the practice unit. Alternatively, Reviewer may submit an interim report to the Board.

➢In the case of interim report, the Board may ask for a review after six months to verify that systems and procedures have been streamlined. In case the Reviewer is not satisfied even at a subsequent review, he may submit report accordingly to the Board incorporating reasons. If even a follow-up review does not satisfy the Reviewer, he may submit a final report to the Board incorporating the reasons for dissatisfaction.

➢Final report to be examined by the Board in terms of compliance with Technical Standards in the light of submissions of the practice unit.

➢ Recommendations and follow up actions, if any,by the Board

➢ Issuance of the Peer Review Certificate by the Board - A hallmark of excellence.