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From the VSCPA: The Importance of Risk Assessment

June 18, 2019

Hello, this is Alan Nicholas, peer review operations manager for the Virginia Society of CPAs (VSCPA) with our third installment of our peer review newsletter. I hope this finds you well after a long and possibly challenging tax season, and that you’re in the midst of some well-deserved vacation planning!  

Now that we’re back in full swing and peer reviews are commencing at a rapid pace, we wanted to focus this installment on a couple of items we thought would be most helpful. A topic that you have probably heard a lot about already and will continue to moving forwards is the enhanced emphasis on risk assessment standards, specifically from a peer review perspective. A brief description as noted in the American Institute of CPAs' (AICPA) April 2019 Peer Reviewer Alert states that engagements that fail to comply with the requirements of AU-C 315 or AU-C 330 should be classified as non-conforming from a peer review perspective. Examples of noncompliance with the risk assessment standards that should cause an engagement to be classified as nonconforming are included in PRP Section 3100, Supplemental Guidance (PDF). Please check out our Staff Tips for links to various resources regarding the enhanced focus on risk assessment and how it relates to your firm’s peer review. 

Additionally, Staff Tips also contains resources to assist you in finding a peer reviewer. The AICPA has developed a very useful search tool to enable you to find a reviewer specific to your needs (and geography, if needed) by adding very specific criteria to their original reviewer search tool.  

In staffing news, we’d like to welcome Phil Windschitl, CPA, as our dedicated Peer Review Technical Director. In his role, Phil will be fulfilling the AICPA’s program requirement by serving as our CPA on staff. Phil brings with him many years of experience as a CPA, as he was a partner at his previous firm, Foti, Flynn, Lowen & Company, P. C., has served as chair of the VSCPA Peer Review Committee, technical reviewer for the VSCPA and assisted as a temporary CPA on staff while the VSCPA diligently worked to transform the administration of the Peer Review Program. Please join us in welcoming Phil on board for his next venture with the VSCPA! 

Lastly, since the AICPA’s Peer Review Integrated Management Application (PRIMA, formerly PRISM) has only been in operation for over a year now, we realize that many firms have still not gone through the peer review process with this application. Please view our Staff Tips to find a carryover of tips regarding accessing PRIMA for the first time. As always, don’t hesitate to contact us if you need assistance along the way — we’re here to help!