SJA PASSES PEER REVIEW

Sattell, Johnson, Appel received notice from the Wisconsin Institute of CPA's (WICPA) that the firm obtained an unmodified report without a letter of comments on its most recent peer review. This marks the fourth straight time that Sattell, Johnson, Appel has achieved the highest grade on its peer review. The receipt of such a report indicates that Sattell, Johnson, Appel complies with the profession's's applicable quality control standards. It also shows that our accounting and auditing work is quality work--work that can be relied upon in making business, personal or financial decisions.

WHAT IS PEER REVIEW?

Recognizing the public's interest in reliable financial statements and the importance the public attaches to reports by CPA's on those statements, the American Institute of Certified Public Accountants (AICPA) requires its members to be enrolled in an Institute-approved practice monitoring program, if the services performed by such a firm are within the scope of the AICPA's practice monitoring standards and issues reports in accordance with professional standards. The AICPA's aim is to maintain and improve the quality of the accounting and auditing services performed by member firms.

This program requires a peer review of a member firm, carried out by other CPA's under the auspices of the AICPA, provides assurance that the firm has an appropriate system of quality control for its accounting and auditing practice and that it is complying with that system.

TIMING AND SERVICES

Firms enrolled in the AICPA peer review program have a peer review completed every three years and six months. In Wisconsin the program is administered by the WICPA's peer review committee. Firms that are engaged to perform audits, agreed upon procedures or examinations of prospective financial statements are required to have an on-site peer review.

TYPES OF SERVICES

On-site reviews evaluate a firm's system of quality control against standards and comprehensive guidelines that have been established by the AICPA. Reviews also test a representative sample of a firm's accounting and auditing engagements for compliance with professional standards. These procedures enable the peer reviewer to determine whether a firm's policies and procedures are adequate to achieve the objectives inherent in the five basic elements of quality control for a CPA firm.

The five quality control elements are as follows:

• Independence, Integrity, and Objectivity
• Personnel Management
• Acceptance and Continuance of Clients and Engagments
• Engagement Performance
• Monitoring

COMMUNICATION OF RESULTS

There are three types of peer review reports that can be issued for an on-site peer review. An unmodified report indicates that there is reasonable assurance that the firm is conforming with professional standards in all material respects. A modified report indicates that there is reasonable assurance that the firm is conforming with professional standards in all material respects except those indicated. An adverse report indicates that there is no reasonable assurance that the firm is conforming with professional standards in all material respects. If the report indicates the need for corrective action, the firm is expected to indicate in writing what it will do to correct the problem. If there are serious problems, the firm will usually be required to undertake additional education, agree to a revisit by the reviewer, or to submit to another peer review within a short period of time.

COPY OF REPORT

A copy of our report is available by contacting Michael Sattell, CPA, CFE. or by clicking here.