References are to North Carolina Administrative Code, Title 21 - Occupational Licensing Boards, Chapter 08 - Board of Certified Public Accountant Examiners, as amended through January 1, 2007.
SUBCHAPTER 08M - PEER REVIEW PROGRAM
SECTION .0100 - GENERAL PEER REVIEW REQUIREMENTS
08M .0105 PEER REVIEW REQUIREMENTS
(a) A CPA or CPA firm providing any of the
following services to the public shall participate in a peer review program:
(1) audits;
(2) reviews of financial statements;
(3) compilations of financial statements;
and
(4) agreed-upon procedures.
(b) A CPA or CPA firm not providing any of the
services listed in Paragraph (a) of this Rule is exempt from peer review until
the issuance of the first report provided to a client.
(c) A CPA, a new CPA firm or a CPA firm exempt
from peer review now providing any of the services in Paragraph (a) of this
Rule shall furnish to the peer review program their first peer review report, the
letter of comments, the letter of response, and any work papers required for
the peer review program within 24 months of the issuance of the first report
provided to a client.
(d) Participation in and completion of one of the
following peer review programs is required:
(1)
(2) AICPA Peer Review Program; or
(3) Any other peer review program found to
be substantially equivalent to Subparagraph (1) or (2) of this Paragraph in
advance by the Board.
(e) CPA firms shall not rearrange their structure
or act in any manner with the intent to avoid participation in peer review.
(f) A CPA firm which does not have offices in
North Carolina and which has not provided any services as listed in Paragraph
(a) of this Rule to North Carolina clients is not required to participate in a
peer review program.
(g) Subsequent peer reviews of a CPA firm are due
three years and six months from the year end of the 12 month period of the
first peer review unless granted an extension by the peer review program.
08m .0106
COMPLIANCE
(a) A CPA firm registered for peer review shall
provide to the Board the following:
(1) Peer review due date;
(2) Year end date;
(3) Final Letter of Acceptance from peer
review program within 60 days of the date of the letter; and
(4) A package to include the Peer Review
Report, Letter of Comments, Letter of Response and Final Letter of Acceptance
for all adverse and second modified reports issued by a peer review program
within 60 days of the date of the Final Letter of Acceptance.
(b) A peer review is not complete until the Final
Letter of Acceptance is issued by the peer review program with the new due
date.
(c) If a CPA firm fails to comply with 21 NCAC
08M .0105(c), (d), or (g), the Board may take disciplinary action against the
CPA firm's members which may include:
(1) a conditional license and one hundred
dollars ($100.00) civil penalty upon conditions as the Board may deem
appropriate for non-compliance of less than 60 days;
(2) a conditional license and two hundred
fifty dollars ($250.00) civil penalty for non-compliance in excess of 60 days
but not more than 120 days; and
(3) a suspension of each member's CPA
certificate for a period of not less than 30 days and a civil penalty of five
hundred dollars ($500.00) for non-compliance in excess of 120 days.
08m .0107 ETHICAL DUTIES OF REVIEWER
(a) A reviewer shall be independent with respect
to the reviewed CPA firm and comply with the AICPA Standards for Performing and
Reporting on Peer Reviews.
(b) Information concerning the participating CPA
firm or its clients or personnel that is obtained as a consequence of the
review is confidential and shall not be disclosed to anyone not involved in the
peer review process.
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