Board of Accountancy: Peer Review


General Information

In 2010, the Colorado legislature changed the Accountancy statutes enacting mandatory peer review requirements of CPAs and CPA firms in Colorado. Please note that the effective date for peer review is referenced in Rule 8.15 - 2014 for CPA firms and 2015 for individual CPAs.

During renewal, CPA firms are required to provide an affirmative attestation that the firm is either subject to peer review or exempt from peer review. Pursuant to §12-2-117(3.7), C.R.S. (2013) and the Rules of the Board of Accountancy, Chapter 8, every firm that issues attest or compilation reports must undergo a peer review.

Misrepresenting the applicability of the peer review requirement could result in disciplinary action. If you have any question with regard to whether your firm issues attest or compilation reports, contact Colorado's sponsoring organization, the Colorado Society of CPAs, at 303-741-8612.

Definition of A&A Practice

An accounting and auditing practice for the purposes of the Peer Review standards is: ALL (even one) engagements performed under Statements on Auditing Standards (SASs); Statements on Standards for Accounting and Review Services (SSARS); Statements on Standards for Attestation Engagements (SSAEs); Government Auditing Standards (the Yellow Book) issued by the U.S. Government Accountability Office; and engagements performed under Public Company Accounting Oversight Board (PCAOB) standards.

Engagements covered in the scope of the program are those included in the firm's accounting and auditing practice that are not subject to PCAOB inspection.

Examples of Engagements

The most common examples of engagements requiring a peer review are:

  • Audits (SAS, PCAOB, Yellow Book)
  • Reviews (SSARS)
  • Compilations, with or without disclosures, where a report is or should be issued (SSARS)
  • Agreed-upon procedures engagements (SSAE)
  • Services Organization Controls (SOC) engagements (SSAE)
  • Examination and compilations of prospective financial statements (SSAE)

One exception to the above listing is Statement on Standards for Accounting and Review Services (SSARS) No. 19, Compilation and Review Engagements (AICPA, Professional Standards, AR sec. 80). This includes compilations of financial statements where, in very specific situations, the accountant may document his or her understanding with the entity through the use of an engagement letter instead of issuing a compilation report. This approach is only available when the accountant submits unaudited financial statements to his or her client that are not expected to be used by a third party (in other words, compilation for management's use only). If the firm performs only these engagements and meets the requirements mentioned in SSARS, it is not subject to peer review.

Peer Review Submissions

By Colorado law, you are not required to submit copies of any peer review related documents unless the Colorado State Board of Accountancy specifically requests them. For more information on the Colorado mandatory peer review requirements, effective for firm registration renewals, please refer to the Rules. Chapter 8, page 54, describes details for peer review compliance. Colorado's sponsoring organization for peer review is the Colorado Society of CPAs. Questions regarding submission of Peer Review should be directed to Susan Vachereau at 303-741-8612 or svachereau@cocpa.org.