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§ 9.8i. Peer review

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 63 P.S. Professions and Occupations (State Licensed)Effective: January 3, 2023

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 63 P.S. Professions and Occupations (State Licensed) (Refs & Annos)
Chapter 1. CPA Law (Refs & Annos)
Effective: January 3, 2023
63 P.S. § 9.8i
§ 9.8i. Peer review
Currentness
(a) As a condition for granting a firm a renewal license, or an initial license in the case of a firm that has previously been engaged in practice in another jurisdiction, the board shall require that the firm be enrolled in a board-approved peer review program unless the firm meets one of the exemptions in subsection (g). The initial or renewal license application of a firm that does not meet one of those exemptions shall include a certification that the firm is in compliance with this section and shall state the name of the organization administering the firm's most recently accepted peer review, the date of acceptance of that peer review and the period covered by that peer review. The board shall not require submittal of the letter of acceptance, peer review report, letter of response or working papers related to the peer review. The board shall verify the date of acceptance and period covered by the firm's most recently accepted peer review through a secure website provided by the entity administering the peer review.
(b) A firm shall not be required to undergo a peer review more frequently than once every three years, except that:
(1) The board may order a firm that has been disciplined under section 9.1 of this act or that has been ordered to take remedial action under subsection (e) to undergo a peer review more frequently.
(2) A new firm that is not subject to subsection (j) shall have its first peer review due eighteen months from the date it was required to enroll in a board-approved peer review program.
(2.2) A firm that was not previously required to enroll in a board-approved peer review program must notify the board within thirty days after accepting an engagement to perform an attest activity other than a compilation and shall have its initial peer review due eighteen months from the date it was required to enroll in a board-approved peer review program.
(3) The regulations of the board may lengthen any of the periods between required peer reviews prescribed in this subsection in such manner, under such circumstances or with respect to such firms as the board in its discretion may consider appropriate.
(4) A firm with fewer than three licensees that was previously not required to undergo a peer review more frequently than once every five years shall, no later than three years before December 31, 2027, and every three years thereafter, undergo a peer review conducted pursuant to peer review standards adopted by the board.
(c) The board shall adopt regulations establishing guidelines for peer reviews which shall:
(1) Require that a peer review be conducted pursuant to a program and standards approved by the board. The board shall approve only peer review programs that the board finds comply with established standards for performing and reporting on peer reviews.
(2) Require that a peer review be conducted by a reviewer that is independent of the firm reviewed and approved by the organization administering the peer review program.
(3) Other than in the peer review process, prohibit the use or public disclosure of information obtained by the reviewer, any organization administering an approved peer review program or the board during or in connection with the peer review process without the firm's permission. The requirement that information not be publicly disclosed shall not apply to a hearing before the board that the firm requests be public under subsection (e) or to the information described in subsection (h)(3).
(d)(1) The peer review of a firm that performs one or more engagements under the Statements on Auditing Standards (SAS), Government Auditing Standards, examinations in accordance with the Statements on Standards for Attestation Engagements (SSAE) or engagements under PCAOB standards as their highest level of service shall have a system review.
(2) The peer review of a firm that performs no engagements under the Statements on Auditing Standards (SAS), Government Auditing Standards, examination engagements in accordance with the Statements on Standards for Attestation Engagements (SSAE) or engagements under PCAOB standards but does perform one or more review engagements in accordance with the Statements on Standards for Accounting and Review Services (SSARS) or services under the Statements on Standards for Attestation Engagements (SSAE) not included in a system review shall be required only to be an engagement review.
(3) Deleted by 2022, Nov. 3, P.L. 1724, No. 110, § 3, effective in 60 days [Jan. 3, 2023].
(e) When the board is made aware that a firm has had the firm's enrollment in peer review dropped or terminated and is not in compliance with the enrollment requirements in this section, the board may consider, pursuant to a hearing or with consent, other measures, including disciplinary action, against the reviewed firm and any individual licensee employed by the reviewed firm. The hearing shall be confidential and shall not be open to the public unless requested by the firm. After conducting the hearing, the board may issue an order that requires both of the following:
(1) Remedial action, which may include any or all of the following:
(i) Requiring employes of the firm to complete general or specific continuing professional education courses.
(ii) Requiring the firm to undergo a peer review more frequently than every three years.
(iii) Any other remedial action specified by the board.
(2) An affidavit from the firm, submitted within the time specified by the board, indicating completion of the required remedial or other actions causing the firm's enrollment in the peer review program to be dropped or terminated and evidence that the firm has reenrolled in peer review. The board shall verify a firm's reenrollment in peer review through a secure website provided by the entity administering the peer review.
(f) The firm reviewed shall pay for any peer review performed.
(g) A firm shall be exempt from the requirement to undergo a peer review if any of the following applies:
(1) Within three years before the date of application for initial or renewal licensure, the firm has undergone a peer review conducted in another state or foreign jurisdiction which meets the requirements of subsection (c)(1) and (2). The board shall verify the date of acceptance through Facilitated State Board Access. The board shall verify the date of acceptance and period covered by the firm's most recently accepted peer review through a secure website provided by the entity administering the peer review.
(2) During the preceding two years, the firm has not accepted or performed any attestation engagements other than a compilation.
(3) For reasons of personal health, military service or other good cause, the firm shall provide to the board a copy of a grant of an extension, including the resulting new due date, within thirty days of receipt from the administering organization.
(h) In any civil action, arbitration or administrative proceeding, regardless of whether a licensee is a party thereto, all of the following shall apply:
(1) The proceedings, records (including, without limitation, letters of acceptance, peer review reports, letters of comment and letters of response) and working papers related to the peer review process of any reviewer, administering organization or board member are privileged and not subject to discovery, subpoena or other means of legal process and may not be introduced into evidence.
(2) No employe, member or agent of an administering organization, reviewer or board member shall be permitted or required to testify as to any matters produced, presented, disclosed or discussed during or in connection with the peer review process or be required to testify to any finding, recommendation, evaluation, opinion or other actions of any person in connection with the peer review process.
(3) No privilege exists under this subsection:
(i) For information presented or considered in the peer review process that was otherwise available to the public.
(ii) For material not prepared in connection with a peer review merely because they subsequently are presented or considered as part of the peer review process.
(iii) In connection with an administrative proceeding or related civil action brought for the purpose of enforcing this section.
(i) Deleted by 2022, Nov. 3, P.L. 1724, No. 110, § 3, effective in 60 days [Jan. 3, 2023].
(j) In the event a practice unit is sold, dissolved or merged with the practice of one or more other practice units, the determination of successor or predecessor practice unit, peer review year end and the peer review due date shall be made in accordance with the administering organization's guidance.
(k)(1) None of the following persons shall be held to have violated any criminal law or to be civilly liable by reason of the performance by him or it of any duty, function or activity under this section so long as the person has not engaged in recklessness or willful misconduct:
(i) reviewers;
(ii) the administering organization or any of its members, employees or agents or any person furnishing professional counsel or services to the administering organization; or
(iii) board members.
(2) Subsection (h) shall not apply to the defense of a claim alleging conduct not protected under clause (1).
(l) Deleted by 2022, Nov. 3, P.L. 1724, No. 110, § 3, effective in 60 days [Jan. 3, 2023].
(m) The fees charged by an administering organization under this section shall not vary depending on whether or not a firm or some or all of its owners or employees are members of the administering organization.

Credits

1947, May 26, P.L. 318, No. 140, § 8.9, added 1996, Dec. 4, P.L. 851, No. 140, § 10, effective in 60 days. Amended 2008, July 9, P.L. 954, No. 73, § 7.1, effective in 60 days [Sept. 8, 2008]; 2016, Nov. 4, P.L. 1186, No. 157, § 3, effective in 60 days [Jan. 3, 2017]; 2022, Nov. 3, P.L. 1724, No. 110, § 3, effective in 60 days [Jan. 3, 2023].
63 P.S. § 9.8i, PA ST 63 P.S. § 9.8i
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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