A PRRC is comprised of CPAs practicing public accountancy and
formed by a sponsoring organization for the purpose of accepting peer
review reports submitted by firms on peer review engagements.
(1) Each member of a PRRC must be active in the practice
of public accountancy at a supervisory level in the assurance or auditing
function while serving on the committee. The member's firm must be
enrolled in an approved practice-monitoring program and have received
a report with a rating of pass on its most recently completed peer
review. A majority of the committee members must satisfy the qualifications
required of system peer review team captains as established and reported
in the AICPA Standards.
(2) Each member of a PRRC must be approved for appointment
by the governing body of the sponsoring organization.
(3) In determining the size of a PRRC, the requirement
for broad industry experience, and the likelihood of some members
needing to recuse themselves during the consideration of some reviews
as a result of the members' close association to the firm or because
they performed the review, shall be considered.
(4) No more than one PRRC member may be from the same
firm.
(5) The PRRC members' terms shall be staggered to provide
for continuity.
(6) A PRRC member may not concurrently serve as:
(A) a member of any state's board of accountancy; or
(B) a member of any state's CPA society's ethics committee.
(7) A PRRC member may not participate in any discussion
or have any vote with respect to a reviewed firm when the committee
member lacks independence as defined in §501.70 of this title
(relating to Independence) or has a conflict of interest. Examples
of conflicts of interest include, but are not limited to:
(A) the member's firm has performed the most recent
peer review of the reviewed firm's accounting and auditing practice;
(B) the member served on the review team, which performed
the current or the immediately preceding review of the enrolled firm;
or
(C) the member believes he cannot be impartial or objective.
(8) Each PRRC member must comply with the confidentiality
requirements of §901.161 of the Act (relating to Privilege for
Certain Information). The sponsoring organization may annually require
its PRRC members to sign a statement acknowledging their appointments
and the responsibilities and obligations of their appointments.
(9) A PRRC decision to accept a report must be made
by not fewer than three members who satisfy the above criteria.
|
| Source Note: The provisions of this §527.10 adopted to be effective October 16, 2002, 27 TexReg 9579; amended to be effective October 12, 2004, 29 TexReg 9540; amended to be effective August 12, 2009, 34 TexReg 5377; amended to be effective June 13, 2013, 38 TexReg 3610; amended to be effective August 4, 2016, 41 TexReg 5555 |
