On August 31, 2017 the AICPA released Evolving Peer Review Administration to Enhance Audit Quality [white paper]. NCACPA knew significant changes to the peer review administration were on the horizon. Since that time, NCACPA has taken great care to adhere to the various benchmarks and new procedures, all while efficiently using available resources.
The AICPA’s requirement of adding a CPA on staff for administering entities caused NCACPA to reassess administration through a different lens. The only alternatives remaining were:
- Including the addition of a North Carolina CPA on staff, which would significantly increase costs to enrolled firms;
- transferring all of North Carolina’s peer review administration to another administering entity (AE); or
- collaborating with other state CPA societies administering peer review to find alternative solutions.
Through discussions with other state societies, NCACPA determined the best option was to collaborate on an innovative, sustainable solution that shares resources and creates economies of scale by spreading the increase in costs, all while maintaining a North Carolina presence in peer review administration. Partnering with another state society provides not only the best alternative for North Carolina firms enrolled in the peer review program, but would also be the first jointly created entity created among administering entities since the New England Peer Review Program was created in the 1980s.
NCACPA is pleased to announce that during June 2020, both the North Carolina Association of CPAs Board of Directors and the Maryland Association of CPAs Board of Directors approved joint peer review administration through a newly created entity, Coastal Peer Review, Inc.! Coastal, incorporated in North Carolina on July 30, 2020, is a 501(c)(6) organization and will be fully operational no later than January 1, 2021.
The new CPA on staff has been identified and will be employed by Coastal. The current staff administrators from the North Carolina and Maryland Associations will remain in place. While the changes we have made to our peer review infrastructure have been innovative and intentional, we are also making every effort to keep your overall peer review process as similar and familiar as possible.
We look forward to sharing further details soon!