Peer Review Issues

Since the publlication of the PPC Guide update one of the biggest concerns expressed by practitioners who oppose the PPC contract liability approach to recording reserve assessments is "How will this affect my peer review?"

Unfortunately there is no clear answer to that question other than "it depends."  What it depends on is who your peer reviewer is and what their position is on this issue.  Several practitioners have reported that they have spoken with their peer reviewer to ask this specific question.  One peer reviewer responded that they intended to follow the PPC approach but also admitted they were not aware of any other interpretations.  The few other peer reviewers that responded said either that (1) they did not understand why anyone would think that the contract liability approach should apply to CIRAs reserve assessments or (2) as long as the practioner documented their position regarding implementation of ASC 606 their position would be accepted as compliance with that standard.

As stated elsewhere on this site discussions with staff at the AICPA Peer Review Division who are currently working on the CIRA Peer Review Checklist update have not resulted in any firm commitment as to the position(s) they will be taking in updating the checklist.  However, they are fully aware of the significant diversity of opinion on this matter and admitted they welcomed the documentation provided supporting the position that the contract liability method should not apply to CIRA reserve assessments and acknowledged that would be considered as they developed the checklists.