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Tax & AccountingOctober 18, 2021

CCH Audit Talks Tips to a Better Audit Peer Review with Troy Coon of Watson Coon Ryan, LLC

By: Wolters Kluwer Tax and Accounting

In an Audit Talks LIVE podcast, Wolters Kluwer’s Andrea Hearn interviewed Troy Coon about how firms can improve audit quality and develop the audit processes to support better peer review. Troy is a CPA and partner at Watson Coon Ryan, LLC. He is also a certified peer reviewer.

Keep reading for highlights from the episode, or listen to the entire discussion on Soundcloud.

The AICPA Grace Period for Peer Reviews has Ended

Over the past three years, the AICPA gave audit firms a grace period to get ready for tougher compliance. This provided an opportunity to improve the quality of audits before peer reviews became much more stringent.

That grace period ended September 30, 2021. Going forward, things that passed before will no longer get through peer review. Auditors really need to be careful to avoid relying on SALY (same as last year) during risk assessment when planning audits.

Recent research from the AICPA showed in 2014, only 22% of non-conforming peer reviews were being caught by peer review. And then in 2019, that number was up to 80%. That means very few nonconforming engagements will get past peer reviewers in the future. 

Auditors Express Uncertainty Over Standards for Risk Assessment

During the podcast, Troy noted there is still a lot of confusion over risk assessment. Auditors have trouble keeping up with changing standards and knowing when to implement certain standards versus when they do not apply. The timing of new standards, such as revenue recognition and leases, have had some effective dates changed because of the coronavirus pandemic.

Enhance Audit Quality With the Right Audit Technology

Troy believes having the right set of tools is the biggest key to better auditing; good auditing tools let professionals structure the engagement correctly and tailor the audit for each client. Specifically, his firm uses CCH® ProSystem fx® Knowledge Coach to create tailored audit plans, conduct risk assessments, and document the linkages from procedures back to risks. He says Knowledge Coach helps auditors out by enabling them to tailor the audit and “really dissect it, get to the risks, and then address those risks properly.”

Troy added, “The whole objective of the audit is for it to be both efficient and effective… you want to tailor this engagement to specific to the engagement itself, which is what the standards require. Everybody has all these different tools from different vendors, but tailoring is the key. We found using some of our tools in our tool belt really allows us to tailor jobs to the specific risks, address those risks, document how we did that. And then that's how we meet the standards.”

For a more in-depth discussion of common peer review issues plus insights about how to improve audit quality with Knowledge Coach, please listen to the entire podcast.

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