MassCPAs Peer Review Update - FAQ

After a lengthy and deliberate evaluation and selection process, and at the request of the Peer Review Executive Committee and support of the Peer Review Executive Selection Committee, MassCPAs Board of Directors unanimously voted to transfer administration of the AICPA’s Peer Review Program to New England Peer Review (NEPR). Please note that this decision does not impact the relationship between firms and their current peer reviewer. 

Peer review has been in flux since the AICPA changed some of the requirements to be an administering entity (AE) in 2017. This change has had a significant impact on MassCPAs. Current projections show that MassCPAs will lose more than $400,000 over the next five years should the program continue in its current state. This is caused by two factors:

Participation in the program has rapidly declined. We have lost about 50% of our enrolled firms and related revenues over the past seven years.

Expenses continue to increase. When the AICPA required that the Director be a CPA, that increased our expenses, and those new, higher expenses will continue to increase by an average of 5% per year.

The Society cannot absorb a loss of that magnitude, so MassCPAs’ Board of Directors directed the Society to explore finding a successor Administering Entity (AE) for the Peer Review Program. To be clear, firms will still have the option to work with the local peer reviewer of their choice.

With the Peer Review Executive Committee and Peer Review Selection Committee, MassCPAs met with four potential AEs. While each had its merits and drawbacks, NEPR stands out for its local familiarity and capability to absorb our staff and peer review volunteers, which will provide the least amount of disruption to our member firms. MassCPAs will be joining Maine, Rhode Island and Vermont, as NEPR is the AE for these states. We will also have a role in shaping the NEPR board, providing an opportunity to address any long-term concerns around sustainability. You can learn more about NEPR by visiting their website.

Outsourcing the peer review program to NEPR will not disrupt your firm’s peer review, but it will benefit your firm in the following ways:

You can work with the same reviewer. The Society understands the important relationship between a firm and their peer reviewer. This change has no impact on that relationship, as firms will still be able to use the same peer reviewers.

Continued local representation. NEPR stands out for its local familiarity and capability to absorb our staff and peer review volunteers, which will provide the least amount of disruption to our member firms. MassCPAs will be joining Maine, New Hampshire, Rhode Island, and Vermont, as NEPR is the AE for these states.

Location of your reviewer does not matter. Firms can select their peer reviewer from any location. Your peer reviewer does not need to be a MassCPAs member or based in Massachusetts to be your peer reviewer, and firms can change their peer reviewer at any time. This gives firms the opportunity to select from a wide range of reviewers to find the right reviewer for them.

Future MA influence. MassCPAs will have a role in shaping the NEPR board, providing an opportunity to address any long-term concerns around sustainability.

2024 annual fees will be pro-rated.

Most reviews that are in process will be complete by the time the transfer is finalized, and we will be reaching out to firms who have reviews that are more complex and unlikely to be completed in the next several months.

If you need to schedule a peer review, you can contact NEPR now. MassCPAs can also work with you on a transition plan.

MassCPAs’ mission is to protect, enhance and promote the value of being a CPA in Massachusetts. We accomplish this by offering opportunities for members to learn, connect and prosper in the profession. In recent years, we’ve collaborated with our small firm advisory group to maximize our value to small firms. This has resulted in new member benefits, including The HUB, Small Firm Roundtables, Member Networking Nights, HR Hotline, help at Board of Public Accountancy (BOPA) and Department of Revenue (DOR), the Legislative Brief, and much more.

Outsourcing the administration of the AICPA’s Peer Review Program to NEPR allows us to continue to invest in these important initiatives for the benefit of small firms while also continuing to support firms with the administration of peer review through a new AE partnership.

NEPR will absorb MassCPAs staff and peer review volunteers, so member firms can continue to work directly with them. Going forward, the Society will also have a role in shaping the NEPR board, which provides us with an opportunity to address any long-term concerns around sustainability of NEPR’s program.

Subject to AICPA approval, we expect the transfer to be finalized in the spring of 2024.