Peer review may be described as an independent review of a firm‘s accounting and auditing practices. It is intended that the review be done by practitioners upon fellow practitioners hence the team peer review.
The work of the review is limited to: –
– Professional aspects of the practice
– Overall total quality control policies.
– Professional aspects of the firm‘s accounting and auditing practices like maintenance of working papers work products such as financial statements.
Reasons for introducing peer review
– There is a desire on the part of professional bodies worldwide today to ensure that their members apply and observe professional standards.
– ICPAK deems it appropriate to ensure adherence to existing technical standards through this mechanism of monitoring compliance.
– It is better for professional bodies to be self regulating than to be government regulated.
Benefits/Advantages of peer review
– To promote compliance with professional standards and other technical pronouncements.
– To provide reasonable assurance to users of financial statements that professional standards have been complied with in the performance of audit and related services.
– To gain increased user confidence in the reliability of audited financial statements.
– To promote uniform application of generally accepted methods of professional practice.
– To establish a mechanism of continuous quality improvement in professional practice and self regulatory framework for policies and procedures.
– To enhance the status of the image of CPA‘s to the public through the assurance of compliance and quality in the performance of audit and related services.
– To help ensure that auditors are competent and to identify potential problems in these regards at an early stage for necessary collective action to be taken.
– To help identify weaknesses in the audit process and provide technical assistance for professional development.