What's New in PRIMA?

September 2018 

If you tend to run late in completing your peer review, changes are coming. Here’s why. In 2017, the AICPA Peer Review Program (Program) updated its mandatory reporting mechanism with a new application called the Peer Review Information Management Application (PRIMA). PRIMA is a web-based system that tracks each step of the peer review, who has it, and how long they have it. It does this by tracking each peer review’s movements.

Each review has its own numbering system further broken down into cases, which are identified by prefixes (see table below). The cases are assigned to responsible parties. PRIMA requires distinct actions by each responsible party. Each case may be assigned to one or more parties at a time.

For those of you who had your peer review in 2017, we thank you for your patience. For you, the good news is that more than 200 enhancements to PRIMA have occurred and streamlined the user experience.

PRIMA was designed to more closely align with Peer Review Board (PRB) standards and guidance. As a result, it holds firms and reviewers accountable in a way that the prior system could not. What this means to us is that the system can be unforgiving, as it runs on A/B switches. PRIMA counts days and issues warnings when the responsible parties delay the process, and that’s where the A/B switches come into play.

The administering entity (CTCPA) is now required to monitor and report to the AICPA how well we do at meeting the benchmarks related to our administration of the Program.

When reviews are past due, the A/B switches require that someone be held accountable. Switch A holds the reviewer responsible, indicating they held up the review by not submitting workpapers. Overdue workpapers may cause the reviewer to be unable to perform peer reviews, if they do not respond after receiving a warning email. Switch B holds the firm responsible and the effect is potential referral of the firm to the PRB for non-cooperation, if they do not respond after receiving three warning emails.

Referrals of firms to the PRB had been up to the discretion of the CTCPA committee with input from the administrator. Under PRIMA, someone will be held accountable for failure to complete the peer review by the due date.

The practical effect is, reviewers may be less likely to take on a review for firms slow to complete their peer review information and scheduling cases.

Please note, AICPA guidance requires all extension requests to be made in writing to the administering entity (CTCPA) 60 days in advance of the peer review due date. Extensions are not guaranteed. The AICPA would prefer extensions only be granted under extenuating circumstances. With so many cycles since peer review was put in place, the AICPA’s stance is that firms know when their review is due and should plan accordingly.

After the reviewer finishes their work at the firm, there are several steps before the review is accepted.

  • Technical review by a CPA who possesses the requisite experience and is independent of the firm and the peer reviewer.
  • Passing engagement reviews without FFCs may be accepted by the technical reviewer.
  • All system reviews and engagement reviews that did not receive a pass report need to go to a report acceptance body (RAB) for further scrutiny. The RAB is made up of three CPAs, who are independent of the firm, reviewer and technical reviewer.
  • Corrective actions and implementation plans for remediation each have their own prefix (COA and IMP) to monitor firm responsiveness. 

In the past, the administrator may have exercised more discretion to soften the impact for non-cooperation. With the tracking system, that discretion is gone. PRIMA is new to everyone: firms, peer reviewers, technical reviewers, report acceptance bodies and administering entities.

Lynette Lindner and I have been working in peer review for just over four months. It’s been a challenge and we are working to anticipate issues and inform firms as soon as possible to avoid bad outcomes.

After full training, Lynette will be administering the program. In the meantime, if you have questions or concerns, please contact me at juliem@ctcpas.org or 860-258-0236.

Best,

Julie McNeal
Director of Finance and Operations