Mandatory Peer Review

General Information | Frequently Asked Questions

General Information

On October 23, 2017, Governor Cuomo signed the new Peer Review Law, which became effective immediately. The new Peer Review Law repealed the exemption from the Peer Review requirement for small firms with two or fewer accounting professionals. The new Peer Review Law requires all CPA firms to undergo a Peer Review if the firm performs any attest services (see question #2 below).

Section 7410 of the State Education Law requires public accounting firms to undergo a peer review of the firm's attest services within 18 months of its initial attest service and thereafter every three years (see question #4 below). Firms must provide the NYS Department of Education (Department) a copy of the peer review documents each time the firm registers with the Department and upon the initial issuance of the peer review documents.

All CPA firms, including sole proprietorships, must register with the Department. For information please review the Registration of Public Accounting Firms.

Firms can verify their firm’s registration status here.

The rules regarding the Mandatory Peer Review Program are complex and will vary significantly depending upon the type of audits and other attest services provided by your firm. In addition, if you peer review results are deemed to be substandard, additional remediation and corrective actions will also be applicable. For more complete information as to these laws and rules, click here for the Education Law Section 7410 and the Regulations of the Commissioner Section 70.10.


Frequently Asked Questions

  1. When are public accountancy firms required to participate in the Mandatory Peer Review Program?

    Firms that provide any attest services are required to participate in the Mandatory Peer Review Program.

  2. What is considered attest services that requires a peer review of a firm?

    Attest services include audits, reviews and examinations conducted under the following standards: Statements on Auditing Standards, Statements on Standards for Accounting and Review Services, Statements on Standards for Attestation Engagements, Government Auditing Standards, and audits of non-SEC issuers performed pursuant to the standards of the PCAOB.

    In more common terms, attest services include Audits, Reviews, Attestation Engagements and Agreed- Upon Procedures.

  3. Do Compilation or Preparation Engagement services qualify as attest services?

    No. Compilation or Preparation Engagement services are not considered attest services. Firms that only provide these services are are not mandated to participate in the peer review program but are encouraged to do so.

  4. When is the initial performance of attest services considered?

    Initial performance of services means when the firm or a professional in the firm first begins the process to perform an attest service. This could include the receipt of a signed engagement letter from a client, the initial planning for an audit or other service, or the start of engagement fieldwork, whichever occurs first.

    Firms that offer these services become subject to the Mandatory Peer Review Program and must complete specific actions as outlined below.

  5. What specific actions does a firm need to take when it becomes subject to the Mandatory Peer Review Program?

    Firms MUST take the following actions:

    • Within 30 days of the initial performance of attest services
      • Notify the Department, and
      • Provide proof of enrollment in the AICPA’s peer review program; and
    • Within 18 months of the initial performance of attest services complete the peer review process.

  6. How do I enroll in the peer review program?

    Currently, the accepted peer review program is the AICPA’s Peer Review Program. The firm must enroll using the AICPA’s Peer Review Integrated Management Application (PRIMA), and follow the procedures posted on the AICPA’s website for enrolling in the peer review program.

    Firms enroll in the AICPA’s peer review program by submitting the AICPA’s Public Accounting Firm Creation Form. The form must be submitted to an Administrating Entity to enroll in the peer review program. Additional enrollment information can be found on the AICPA’s website at: www.aicpa.org/interestareas/peerreview.html

    The enrollment letter will be issued to the firm when complete. The firm must submit the enrollment letter with its notification to the Department.

  7. Do I need an AICPA membership to enroll into the peer review program?

    No. Firms that are not members of the AICPA are allowed to enroll in the peer review program.

  8. Can out-of-state firms satisfy the peer review requirement with a peer review that was administered by an out-of-state administering entity?

    Yes. Firms located in another state can enroll in that state’s peer review program as long as it is the AICPA’s peer review program. Your firm will need to make your documents accessible to the New York State Board of Accountancy and the Peer Review Oversight Committee. You may do this through the PRIMA website by selecting NY or you may submit copies of the documents via email, mail or facsimile.

  9. What is an Administering Entity?

    The Administering Entity is the entity (usually a committee of a state society) responsible for administration of the AICPA Peer Review Program generally for firms in particular regions or states.

  10. What if my firm was previously exempt from the peer review program but participated in the peer review program on a voluntary basis?

    If your firm is already participating in the peer review program, your firm will continue the 3-year cycle of having a peer review performed. When the firm files their annual statement or the triennial firm registration renewal, the firm must provide their most recent peer review report, acceptance letter and other peer review related letters, as applicable.

  11. What if my firm was previously exempt from the Mandatory Peer Review Program (MPRP) and the firm did not participate in the peer review program?

    Firms that perform attest services and were previously exempt from the MPRP fall into one of the following two categories:

    • Firms that were performing attest services as of October 23, 2017, the effective date of the law, were immediately subject to the MPRP. These firms should immediately enroll in the AICPA’s peer review program by submitting the AICPA’s Public Accounting Firm Creation Form using the Peer Review Integrated Management Application (PRIMA) (see question #6). The form must be submitted to an Administrating Entity to enroll in the peer review program. The firm must notify the Department within 30 days and provide proof of enrollment in the peer review program; or
    • Firms that were not performing attest services as of October 23, 2017, the effective date of the law, have 30 days from the initial performance of an attest service to notify the Department and include proof of enrollment in the peer review program.

  12. What action is required of the firm to complete the peer review process?

    The firm owners must cooperate with the peer reviewer and administering entity. Once the peer review documents are issued, firms must make them available to the Department. The documents may be made available via the AICPA’s website within thirty days of the date of issuance. If the documents cannot be provided via the website, the firm must provide copies of the peer review documents to the Department by mail, email or facsimile within ten days of receipt of the document.

  13. What are the possible results of a peer review?

    A firm can receive the following peer review report ratings: pass, pass with deficiencies, or fail.

  14. What is the impact of receiving a pass with deficiency or a fail rating on my peer review?

    The American Institute of Certified Public Accountants (AICPA) Peer Review Standards outline the implications of receiving a rating other than pass. Please access the AICPA’s website for additional information.

    The Peer Review Oversight Committee monitors firms who have received a rating other than pass. See question #19 below.

  15. What competency requirements must my firm meet if I receive a rating of fail.

    The licensees who supervised attest services had at least 1,000 hours of experience within the previous five years in providing attest services or reporting on financial statements gained through employment in government, private industry, public practice or an education institution satisfactory to the State Board for Public Accountancy.

  16. What are the peer review documents that must be submitted after the peer review is completed?

    The peer review documents consist of the following: the Peer Review report issued by the reviewing firm and the acceptance letter issued by the Administering Entity.

  17. What are the requirements for firms that do not provide attest services?

    Firms that do not provide attest services are required to notify the Department that the firm does not perform attest services and it is not required to participate in the peer review program. Annually, firms are sent a CPA Form 6PR to report this information. Firms are required to return the form within 30 days of its receipt to the Department.

Overview of the Peer Review Oversight Committee

  1. What is the Peer Review Oversight Committee?

    The Peer Review Oversight Committee (PROC) is a committee comprised of six members, with five of them required to be a Certified Public Accountant. The PROC is separate from the State Board for Public Accountancy. The PROC is charged with overseeing the Mandatory Peer Review Program in New York State. Annually it reports to the Board and the Department on its monitoring activities and issues related to the peer review program.

    The PROC monitors the status of all firms that are required to be enrolled into the peer review program.

  2. What if I receive a letter from the Peer Review Oversight Committee (PROC) stating that it is monitoring my firm due to a peer review report with a rating of fail or pass with deficiencies?

    Your firm is required to respond to the monitoring letter within 30 days of its receipt to acknowledge that the PROC will monitor your firm’s compliance with the corrective actions prescribed by the administering entity.

  3. What can the firm owners do if they have questions?

    Firm owners can contact the State Board for Public Accountancy or the Peer Review Oversight Committee for additional information. You may call, write or email if you have questions regarding the Mandatory Peer Review Program. NY State Education Department

    Office of the Professions
    State Board for Public Accountancy / Peer Review Oversight Committee
    89 Washington Avenue
    Albany, New York 12234-1000
    Phone: 518-474-3817, ext. 160
    Fax: 518-474-6375
    E-mail: cpabd@nysed.gov

Last Updated: January 17, 2018