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Committee presses white paper on APSPEs: 'Quality control is a firm function,' members say
Summary
Ray Johnson led a detailed discussion of white paper questions about independence, disclosure and enforcement in alternative practice structures; members flagged risks when attest entities have few or no in‑house staff and urged peer‑review and firm‑level guardrails.
Ray Johnson walked the Laws & Rules Committee through his draft comments on the white paper sections addressing independence, professional standards, disclosure and regulatory oversight. He argued the core question is whether attest functions operating within APSPE models retain firm‑level quality control, especially when attest entities have minimal in‑house personnel and rely on leased staff. “Quality control is not an individual function. Quality control is a firm function,” Johnson said, urging the committee to emphasize firm‑level safeguards.
Members discussed practical options—training peer reviewers to evaluate APSPE arrangements, expanding peer review to include professionals who sign reports even if they are leased, or regulating the personnel‑holding entities—while acknowledging each approach carries tradeoffs and that Oregon could be an outlier if it seeks to regulate non‑assurance entities. The committee asked Ray to redraft the response, and set a virtual follow‑up meeting for Jan. 20 to review revisions before the Jan. 29 board meeting.
