Clarifications

A panel of reviewers will be maintained by the Peer Review Board, satisfying the qualification requirements laid down in the Statement, i.e., an individual should be a member of the Institute; possess atleast 10 years experience of audit; and be currently active in the practice of accounting and auditing.

In this context, the Board has clarified that 10 years experience of audit should not necessarily be continuous but cumulative experience of 10 years. Any period of audit experience of less than 2 years shall not be counted for this purpose. Also mere membership of 10 years would not be enough to be empanelled as a reviewer. It has to be 10 years experience of audit.

For the purpose of maintaining the panel, the Board invites applications in the prescribed format from members desirous of empanelment. The form of application requires the applicants to furnish such particulars as would enable the Board to assess the core competence of the applicants for conducting peer review.

In order to ensure that there is no mis-match between the audit experience of the reviewer and the practice unit, the Board has clarified that the selection of reviewer for allotment of review would be based on his experience vis-à-vis the attestation functions performed by a practice unit. The panel of reviewers would be reviewed by the sub-group formed for this purpose by the Board for time to time by suitably matching the reviewer's experience with the practice unit's attest engagements. Empanelment as a reviewer is no guarantee that the applicants empanelled would be eligible for allotment of peer review work.

The Statement provides that the reviewer may take the help of a qualified assistant while carrying out peer review.

In this context, the Board has clarified that a reviewer is permitted to take the assistance of only one assistant who shall be a chartered accountant and a person who does not attract any of the dis-qualifications prescribed under Section 8 or Section 21 of the Chartered Accountants Act, 1949. The name of the qualified assistant which the reviewer would like to assist him shall be identified and intimated to the Board as well as practice unit before the commencement of the peer review. Such a qualified assistant shall also have to sign the declaration of confidentiality as annexed to the Statement. He shall have no direct interface either with the practice unit or the Board. Further the person chosen for assisting the reviewer shall be from the firm of the reviewer and should have been working with him for atleast one year as a member in practice.

A reviewer should note that peer review visits will be conducted at the practice unit's head office. It may also be possible that if a practice unit happens to be quite a big outfit and has several branches, the reviewer may have to visit more than once.

The Board has clarified that the reviewer may not visit a branch (outside the city/town limits from head office) of practice unit unless the turnover of attestation functions of that branch is more than one million rupees. In such case, he may instruct the practice unit to get documents and relevant records in respect of attestation engagement performed by such branch office

The Statement as per paragraph 12.1, requires the practice unit to produce to the reviewer or afford him access to, any record or document which contains or is likely to contain information relevant to the peer review.

The Board has clarified that the reviewer may have access to, or take the abstracts of the records and documents maintained by the practice unit in order to carry out the review work at practice unit's office, but in order to ensure the confidentiality of client's file with the practice unit, the reviewer shall not carry extracts of the client's files or records acquired by him while conducting peer review, as part of his working papers.

Applicability of Service Tax/ Registration of Reviewer.

The Board has clarified that service tax is payable by the Reviewer for the peer review assignment. The Board has further clarified that if the Reviewer is in whole- time practice as a partner or a proprietor of a C. A. firm, then he should credit the cost of review received by him to the firm's account and pay service tax accordingly, though he is acting as a Reviewer in his individual capacity.