GCR 4/12
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LIST OF SUBSTANTIVE CHANGES AND ADDITIONS
PPC's Guide to Quality ControlĊCompilation and Review
Fifth Edition (April 2012)
The following are some of the features of the 2012 edition of PPC’s Guide to Quality Control—Compilation and
Review:
Code of Professional Conduct Revisions. Since the last update of this Guide, the AICPA has issued new or
revised Ethics Definitions, Interpretations, and Rulings under ET sections 100, 101, 391, and 501. All pertinent
chapter discussions, as well as our detailed ethics compliance practice aids, have been revised to reflect the
newly effective guidance. By staying current with the latest ethical requirements and integrating that guidance
to the firm's quality control system, you can be confident of maintaining an effective and compliant quality
control system.
New CPE Standard Requirements. In January 2012, NASBA and the AICPA issued revisions in final form to
the Statement on Standards for Continuing Professional Education (CPE) Programs. While the revised CPE
Standards will not, for the most part, impose major changes, changes have been made in the areas of group
internetĆbased learning, selfĆstudy programs, and inĆhouse training. The revised CPE Standards will generally
be effective on July 1, 2012. The Guide incorporates those new requirements in chapter discussions and related
practice aids.
AICPA Peer Review Program Manual Revision. The AICPA Peer Review Program Manual (PRPM) is a good
source of information for designing and maintaining the firm's quality control policies and procedures. The
PRPM was updated effective January 1, 2012, and we have incorporated the relevant changes into the 2012
Edition of this Guide to provide you with the most current AICPA peer review manual information available.
Chapter
Substantive Changes and Additions
Reference
Throughout the Guide
1. Revised all SQCS No. 8 paragraph references to QC 10 Throughout
paragraph references.
CHAPTER 1
Quality ControlĊ
An Overview
1. Updated the discussion regarding the recent history of the Paragraphs 101.1ć.2
quality control standards for the reissuance of SQCS No. 8
in conjunction with the issuance of the clarified auditing
standards.
2. Revised the discussion of the ASB's Clarity Project for the Paragraphs 101.3ć.5
issuance of the clarified auditing standards as SAS No. 122.
3. Expanded the discussion of the purpose and use of the Paragraph 102.4
application and other explanatory material included in
SQCS No. 8.
CHAPTER 3
Relevant Ethical
Requirements
1. Updated the listing of ethical requirements to include new Exhibit 3Ć1
interpretations issued since the prior update of the Guide.
2. Updated the status of the AICPA's Ethics Codification Paragraph 301.3,
Project.
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GCR 4/12
Chapter
Substantive Changes and Additions
Reference
3. Added a discussion of new Ethics Interpretation 101Ć18, Paragraph 302.10
Application of the Independence Rules to Affiliates, effective
as of January 1, 2014.
4. Added a discussion of new Ethics Interpretation 101Ć19, Paragraph 302.11
Permitted Employment With Client Educational Institution,
which was effective on November 30, 2011.
5. Updated the discussion of PEEC's current Ethics InterpretaĆ Paragraph 302.13
tion 101Ć3 project, which is still ongoing.
CHAPTER 4
Acceptance and
Continuance of
Client Relationships
and Specific
Engagements
CHAPTER 5
Human Resources
1. Clarified that management's refusal to provide all written Paragraph 406.7
representations will generally constitute a scope limitation.
2. Clarified one of the circumstances in which SSARS requires Paragraph 406.8
an accountant to withdraw from a compilation or review
engagement.
1. Explained that the AICPA Code of Professional Conduct Paragraph 503.5
also provides ethical requirements regarding the perforĆ
mance of professional services.
2. Updated various professional development discussions for Paragraphs 504.5,
the issuance of revised CPE standards, generally effective 504.8, and 504.26
on July 1, 2012.
CHAPTER 6
Engagement
Performance
1. Emphasized that when documentation required by SSARS Paragraph 601.13
No. 19 is identified as consistently missing during peer
review, receiving a pass with deficiencies or fail report can
result.
2. Added information about a new SSARS interpretation.
CHAPTER 8
The Peer Review
P
d
Process and
Undergoing
Engagement
Review
Paragraph 601.17
1. Updated the introductory discussion of the peer review Paragraphs 800.3
process for current information.
and 800.5
2. Clarified that a firm must enroll in the AICPA Peer Review Paragraph 802.3
Program before the firm's initial peer review can be
scheduled, and provided a link to the AICPA's enrollment
form.
3. Emphasized the importance of completing preliminary peer Paragraph 802.7
review paperwork as soon as possible.
4. Added a new representation that firms are required to Paragraph 803.5
provide to peer reviewers if the firm uses externally
developed quality control materials.
5. Expanded discussion of the FFC form to include recent Paragraph 803.21
changes to the form made by the peer review board.
6. Clarified disposition of a firm's letter of response and FFC Paragraph 804.15
form responses near the end of the peer review.
7. Updated the illustrative MFC and FFC forms in accordance Appendixes 8CĆ1
with changes made in the AICPA Peer Review Program and 8CĆ2
Manual.
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GCR 4/12
Chapter
Substantive Changes and Additions
Reference
PRACTICE AIDS
Independence,
Integrity, and
Objectivity
Questionnaire
1. Revised Section II (Parts AćD and FćI) and certain terms in GCRĆPAĆ3.2
the glossary (Section IV) due to the deletion of various
Ethics Rulings; issuance of a new Interpretation 101Ć19,
Permitted Employment With Client Educational Institution;
and revision to the AICPA Conceptual Framework (paraĆ
graph 20), all effective as of November 30, 2011.
InĆhouse CPE
Program
2. Modified the form to incorporate new requirements from the GCRĆPAĆ9.2
revised Statements on Standards for Continuing Education
Programs (CPE Standards), generally effective as of July 1,
2012.
QualificationsĊ
Inhouse CPE
Program
3. Expanded the instructions to explain a new requirement GCRĆPAĆ9.3
due to the revised CPE Standards.
Inspection/Review
ChecklistĊFirm
with Two or More
Professionals
4. Revised Section IV, Part I, item 3, to add the firm's GCRĆPAĆ12.3
consideration of the result of its provider's peer review
report as part of its monitoring review.
5. Added question 1e to Section V for firms to consider GCRĆPAĆ12.3
whether the partner in charge of the engagement had
appropriate competencies.
Inspection/Review
ChecklistĊSole
Practitioner with No
Professional Staff
General Compilation
Engagement
Review Checklists
General Review
Engagement
Review Checklists
Representation
Letter Drafting
Form
6. Revised Section IV, Part F, item 3, to add the firm's GCRĆPAĆ12.4
consideration of its QCM provider's peer review report
result as part of its monitoring review.
7. Added question 1e to Section V for firms to consider whether
the partner in charge of the engagement had appropriate
competencies.
8. Made changes throughout, primarily resulting from
changes in the related PPC quality control material checkĆ
lists.
9. Made changes throughout, primarily resulting from
changes in the related PPC quality control material checkĆ
lists.
10. Updated the drafting form in accordance with changes
made in the PRPM.
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GCRĆPAĆ12.4
GCRĆPAĆ12.5
GCRĆPAĆ12.6
GCRĆPAĆ16.2