Peer review

Definition

The outside quality review a firm doing attest work must pass on a cycle.

Why It Matters

A firm that performs audits, reviews or compilations is inspected by another firm on a fixed cycle, and the result is a rating that some state boards publish. It gates the work: a lapsed or failed review can stop the attest side trading while the rest of the practice carries on, which turns the highest-margin service line into a liability at exactly the wrong time. Ask for the last report and the date the next one is due, and read who signed the engagements, because a review passed under the seller's supervision says less about the practice once the seller has gone.