Peer Reviews: Avoiding Independence Problems

Peer reviewers are finding plenty of issues regarding independence (and documentation)

Peer reviewers continue to hammer independence and related documentation. So it is vitally important that we not only be independent but that we also properly document its presence. My prior independence post pointed out that peer review checklists require reviewers to examine your independence documentation. This short video provides tips regarding independence and staying out of the dog house.

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Please note: I reserve the right to delete comments that are offensive or off-topic.

  • Jim Bennett says:

    Hi Charles – often for my clients, the review the financial statements that we prepare is a team effort. For example the Executive Director and the Controller will review them together, and together, I feel they have the SKE.

    But the standards says “person” with SKE – how literal is “person”?

    I checked with the AICPA technical hotline, and they seemed to indicate that “person” could really be one or more persons.

    To me, this is just common sense – does the client have an adequate review process, whether that takes one person or 10 people. As long as they are bring the right skills to it, that’s fine with me.

    So, don’t get hung up on “person”. Of course that means your independence documentation should identify the people that collectively have the SKE.

  • Charles Hall says:

    Jim, yes, SKE normally is found in a particular person, but it can be more than one. I agree that your documentation would then need to address the persons with the SKE and what they do. Thanks.