201 KAR 1:160. Peer reviews.

      RELATES TO: KRS 325.301(6)

      STATUTORY AUTHORITY: KRS 325.240, 325.301(6)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 325.301(6) establishes certified public accounting firm review standards. This administrative regulation establishes the procedures that a CPA firm must follow to obtain a peer review.

      Section 1. Definitions. "Sponsoring organization" means an entity operating a peer review program whose standards of review are equivalent to or better than the "Standards for Performing and Reporting on Peer Reviews" of the American Institute of Certified Public Accountants.

      Section 2. (1)(a) The board shall review its records to determine if a firm that performs audits, reviews or compilations has submitted proof that it is enrolled and has completed a peer review program administered by a sponsoring organization.

      (b) If proof has not been submitted, a letter shall be issued to the firm advising it that it shall enroll in a peer review program operated by a sponsoring organization within forty-five (45) days of the date of the letter.

      (2) Within twenty-four (24) months of the date of enrollment in a peer review program conducted by a sponsoring organization, the firm shall submit to the board:

      (a) A letter from the sponsoring organization indicating satisfactory completion of a peer review; or

      (b) The peer review report.

      (3)(a) A sponsoring organization shall report to the board on a semiannual basis the names of the firms enrolled in the peer review program.

      (b) A sponsoring organization shall bear the costs of verifying compliance with the standards for performing peer reviews.

      Section 3. If a firm is not enrolled in an approved peer review program when it enters into an agreement to perform an audit, review or compilation, it shall not begin work on the engagement until it has enrolled in an approved peer review program.

      Section 4. Incorporation by Reference. (1) "Standards for Performing and Reporting on Peer Reviews, June 1, 1999" is incorporated by reference.

      (2) This material may be inspected, copied, or obtained, subject to applicable copyright laws, at the office of the State Board of Accountancy, 332 W. Broadway, Suite 310, Louisville, Kentucky 40202, Monday through Friday, 8 a.m. to 4:30 p.m. (22 Ky.R. 2192; Am. 23 Ky.R. 122; eff. 7-5-96; 27 Ky.R. 590; eff. 10-16-2000.)