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.