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Committee raises quality-control concerns for two firms with repeated peer-review deficiencies
Summary
Members probed repeated deficiencies in firms numbered 41 and 42, questioned whether leadership and failure to apply CPE drove issues, and tracked corrective actions including outside monitoring and waivers after firms ceased single-audit work.
Committee members spent substantial time reviewing consecutive nonpass firm files (items 41 and 42), noting repeated deficiencies tied to quality-control systems, lack of application of continuing professional education (CPE), and concerns about Yellow Book independence in governmental audits. John reported the RAB had accepted several pass ratings at a recent meeting but singled out one firm that had completed corrective action after a prior fail; discussion then turned to the two current nonpass firms.
"That's 40 hours a year for the for partners and managers, and it's, it's 24 for staff," John said when describing Yellow Book CPE expectations and why members were surprised that apparent CPE had not been applied in engagements. Members questioned whether repeated notes of the same deficiencies should lead to a failure rather than a second 'pass with deficiency.'
For one firm (item 42) members reported the firm ceased performing single audits and requested a waiver of preassurance reviews because no future single-audit engagements were planned; staff confirmed the waiver would be granted when there was no preissuance review to perform. For the other firm (item 41) corrective actions remained open and the committee decided to continue tracking progress, including an outside monitoring report due by December 31 and preissuance review activity.
No formal discipline was initiated at this meeting; members emphasized continued monitoring, documentation of corrective actions, and returning items to the tracker for follow-up.
