Expanding the Scope of Peer Reviews: A Critical Examination

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Abstract

The accounting profession has long touted peer review as a means to improve audit quality. About 23,500 CPA firms participate in the AICPA’s peer review program to show compliance with professional standards (AICPA, 2020). PCAOB inspections have replaced self-regulation of public company audits, but quality of other audit and assurance engagements remains under the AICPA purview.

Our examination of the peer review literature shows correlations between peer review and audit quality. We found “problem areas” of audits related to Department of Labor (DOL) reports and government reporting of employee benefit plans and other government entities. Examining the current peer-review process, we suggest research to understand the perceptions, attitudes, and roles of those who oversee, conduct, and benefit from peer review including the DOL and governmental reporting.Considering the behavioral implications of making robust changes in what began as self-regulatory peer review, we offer a positive view for how research can illuminate the future of peer review to improve audit quality for assurance services.

Authors

• Alan Reinstein, Wayne State University

• Natalie T Churyk, Northern Illinois University

• Cathleen L Miller, University of Michigan-Flint