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Chapter 20-13 PEER REVIEW REQUIREMENTS FOR PUBLIC ACCOUNTING FIRMS

Rule 20-13-.01 Purpose

The purpose of these Rules is to prescribe the requirements for the peer review; monitor compliance with applicable accounting and auditing standards adopted by generally recognized standard-setting bodies; emphasize education, including appropriate education programs or remedial procedures that may be recommended or required where reporting does not comply with appropriate professional standards.

Rule 20-13-.02 Renewal Requirements

(1) Each firm that has issued an attest or compilation report within the twenty-four (24) months preceding the date of expiration of the firm's license must submit, with the application for renewal, evidence of satisfactory completion of a Board approved peer review. The Board approved peer review must have been completed within the thirty-six (36) months preceding such firm's registration expiration. Evidence of satisfactory completion shall be the document issued by an organization registered with and approved by the Board for conducting and administrating Board approved peer reviews indicating the type of report and that all remedial/corrective actions, if needed, have been completed and are acceptable.
(2) Each firm that has not issued an attest or compilation report within the twenty-four (24) months preceding the date of expiration of the firm's license must submit written confirmation of such fact with the application for renewal.
(3) Firms that have issued an attest or compilation report within the twenty-four (24) months preceding the date of expiration of the firm's license, but have not had satisfactory completion of a Board approved peer review within the thirty-six (36) months preceding the date of the firm's license shall submit, with the renewal application, the following:
(1) any documents related to a peer review of the firm conducted within the thirty-six (36) months preceding the date of the firm's license expiration; and
(2) a letter explaining the failure to comply. Upon receipt of the above-referenced materials, the Board may deny renewal, waive the peer review requirements, renew with a limited license, or renew with conditions.
(4) Any document submitted to the Board in connection with the requirements of this Rule shall be confidential and not released to the public, pursuant to O.C.G.A. Section 43-3-29.
(5) The application for firm license renewal and documents required under this Rule shall be retained in accordance with the Board's records retention schedule.

Rule 20-13-.03 Board Approved Peer Review

(1) The Board adopts "Standards for Performing and Reporting on Peer Review" promulgated by the American Institute of Certified Public Accountants, as its minimum standards for an approved peer review. This shall not require a membership in any specific organization conducting or administrating Board approved reviews in accordance with these standards.
(2) Board approved peer reviews shall be those reviews conducted under the administration of organizations that register with and are approved by the Board based on their adherence to peer review minimum standards. Any organization that registers and is approved by the Board after July 1, 1998 shall comply with the provisions of subsection (4) of the Rule.
(3) A list of organizations conducting or administering Board approved peer reviews shall be maintained by the Board and available from the Board Office.
(4) To qualify as an organization approved by the Board to conduct or administer peer reviews, an organization must submit a Peer Review Administration Plan to the Board for review and approval.
(a) The plan of administration must:
1. Establish a Peer Review Committee (PRC) and subcommittees as needed, and provide professional staff as needed conducting peer reviews or the administration of peer reviews;
2. Establish procedures to communicate to firms participating in peer reviews the latest developments in peer review standards and the most common findings in the peer reviews conducted by the organization;
3. Establish procedures for resolving any disagreement which may arise out of the performance of a peer review;
4. Establish procedures to evaluate and document the performance of each reviewer, and conduct hearings which may lead to disqualification of a reviewer who does not meet the American Institute of Certified Public Accountants Standards
5. Require the maintenance of records of peer reviews conducted or administered by the organization in accordance with the records retention rules of the American Institute of Certified Public Accountants.
(b) The PRC must be comprised exclusively of licensees in good standing who hold current permits to practice public accounting and must be formed by the organization for the purpose of accepting peer review engagements.
1. Each member of a PRC must be active in the practice of public accountancy at a supervisory level in the accounting or auditing function while serving on the committee. The member's firm must be enrolled for peer review with an organization that is registered and approved by the Board and have received a grade of pass on its most recent peer review. A majority of the committee members must satisfy the qualifications required of on-site peer review team captains as established and reported in the American Institute of Certified Public Accountants Standards for Performing and Reporting on Peer Reviews.
2. The PRC members' term shall be staggered to provide for continuity.
3. A PRC member may not concurrently serve as a member of his or her state's Board of Accountancy.
4. A PRC member may not participate in any discussion or have any vote with respect to a reviewed firm when the committee member lacks independence or has a conflict of interest.
5. A PRC decision to accept a report must be made by a majority of a quorum of members.
(c) Responsibilities of the PRC are to:
1. Establish and administer the organization's peer reviews in accordance with the American Institute of Certified Public Accountants Standards for Performing and Reporting on Peer Reviews;
2. Prescribe actions, when necessary in reviewing reports on peer reviews, designed to assure correction of the deficiencies in the reviewed firm's system of quality control policies and procedures;
3. Monitor the prescribed remedial and corrective actions to determine compliance by the reviewed firm;
4. Resolve instances in which there is a lack of cooperation and disagreement between the committee and review teams or reviewed firms in accordance with the organization's adjudication process;
5. Promptly act upon requests from firms for changes in the timetable of their reviews;
6. Appoint members to subcommittees and task forces as necessary to carry out its functions;
7. Establish and perform procedures for ensuring that reviews are performed and reported on in accordance with American Institute of Certified Public Accountants Standards for Performing and Reporting on Peer Reviews;
8. Establish a report acceptance process which facilitates the exchange of viewpoints among committee members; and
9. Provide to the Board administrative statistical reports regarding their peer reviews if requested.
(5) A report, statement memorandum, transcript, finding, record, or working paper prepared and an opinion formulated in connection with any positive enforcement, or peer review is privileged information held by the organization that has Board approved peer reviews and may not be subject to discovery, subpoena, or other means of legal compulsion for release to any individual and is not admissible as evidence in any judicial or administrative proceeding except for a Board hearing.

Rule 20-13-.04 Peer Review Oversight Committee

(1) The Board shall as it deems necessary, appoint a Peer Review Oversight Committee ("Committee") which shall be chaired by a member of the Board. Members of the Committee shall serve at the pleasure of the Board and may include persons who are not members of the Board, but a majority of the members shall hold current licenses to practice public accountancy and be in good standing at all times while serving on the Committee. Committee members shall not be members of a Peer Review Committee described in Rule 20-13-.03.
(2) The Committee shall assist the Board in implementation and administration of the requirements of this chapter and will have such duties as directed by the Board.

Rule 20-13-.05 Exceptions

(1) A firm that has been licensed for two years or less at the time of the firm's renewals shall be exempted from the requirement of submitting evidence of satisfactory completion of a Board approved peer review.
(2) The Board may waive or modify the requirement of submitting evidence of satisfactory completion of a Board approved peer review in cases of hardship. A firm seeking a hardship exemption must submit a written request that sets forth detailed reasons for the request of exemption. Such request must be submitted with the firm's license renewal application and must be received by Board prior to the expiration of the firm's license. The firm's license will continue until the Board renders a decision on the request. After considering the request, the Board may deny the exception, grant the exception, or grant the exception with limitation and/or conditions.

Rule 20-13-.06 Repealed

Rule 20-13-.07 Repealed