Peer review oversight: CalCPA administers program; non‑conforming engagements concentrate in single‑audit and government work

CalCPA peer‑review staff described how the peer‑review system operates for California firms that use AICPA standards: firms choose peer reviewers, administering entities (CalCPA for most California firms) approve reviewers and perform technical review of completed peer reviews before report acceptance. The PROC described annual administrative site visits to CalCPA and attendance at report acceptance body meetings.

CalCPA said the peer‑review fail rate typically ranges from about 7% to 10% and that non‑conforming engagements are more common in specialized areas such as single audits and government work; staff use risk‑based oversight, assign subject‑matter follow‑ups and require corrective actions (continuing education or post‑issuance reviews) when needed.

Why it matters: Peer review is a regulatory quality‑control mechanism that supplements licensing and enforcement by checking firm systems and sample engagements. The PROC recommended continued oversight and data sharing with the board.

Next steps: CalCPA and PROC will continue annual administrative site visits, report acceptance monitoring and targeted oversight of high‑risk engagement types.