Learn from data to improve audits

To help audit firms develop more-focused remedies for their
accounting and auditing practices, the AICPA Peer Review team has been
collecting data since December 2012 on Matters for Further
Consideration (MFCs). An MFC form is used by peer reviewers to
electronically capture “matters” detected during a peer review that
are the most granular level of information indicating accounting and
auditing deficiencies.

The AICPA Peer Review team is using the data to identify problem
areas in order to provide firms with tools to increase audit quality.
Reviewing these trends can help raise awareness of potential problems
at audit firms and significantly improve audit quality.

This list describes the most frequent matters the Peer Review team
has found related to the following professional standards and practice areas:

U.S. GAAP AUDITS

PROFESSIONAL STANDARDS

Clarified Auditing Standards

Accounting and Review Services

Compilations

Reviews

Attestation Standards

Service Organization Control (SOC) Reports

For SOC 1 engagements, MFCs were most frequently related to:

In the sole MFC discovered related to SOC 2 audits, the report
issued nonstandard wording regarding complementary user entity controls.

PRACTICE AREAS

Governmental, A-133, Housing and Urban Development 

Reporting

Documentation

Employee Retirement Income Security Act

Banking, Including Federal Deposit Insurance Corporation
Improvement Act

Broker-Dealer

The Peer Review team has developed a webpage, available at tinyurl.com/mdvh896, to be
updated quarterly with new MFC data. The page will keep auditors
updated on the matters most commonly found in peer reviews.

In addition to reporting on MFC data, the Peer Review team is an
integral part of the AICPA’s Enhancing Audit Quality (EAQ) initiative.
EAQ is a holistic effort looking at auditing from multiple facets that
is expected to bring changes for the peer review process that will be
designed to continue to improve audit performance.

To comment on this article or to suggest an idea for another
article, contact Ken Tysiac, editorial director, at
ktysiac@aicpa.org
or 919-402-2112.

AICPA RESOURCES

JofA article

“Introducing
the New Principles-Based Peer Review Standards,” May 2009, page 39

Publication

AICPA Peer Review Program Manual (#QR-XX)

CPE self-study

Conference

Governmental and Not-for-Profit Training Program, Oct. 20–22, Las Vegas

For more information or to make a purchase or register, go to cpa2biz.com or call the Institute at 888-777-7077.

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