On September 10th, the AICPA’s Peer Review Board proposed Peer Review Standards Update (PRSU) No. 3, which would centralize the administration of peer reviews of firms operating under alternative practice structures (APS), including those with private equity investments. The change would require firms operating under non-traditional business models to have their peer reviews administered by the AICPA’s National Peer Review Committee, rather than one of the 23 state administering entities. The comment period for the proposed update will be open until Oct. 25 this year. If approved by the Peer Review Board, it would be effective for peer reviews with years ending on or after Dec. 31, 2025.
AICPA Seeks Comment on Administrative Peer Review Proposal for Firms with Private Equity Backing & Other APS
Jaclyn Veno from Galasso Learning Solutions shares an insightful update on the Genuine Learning Blog, diving into a major proposal from the AICPA’s Peer Review Board that could reshape how peer reviews are administered—especially for accounting firms with private equity investments and other alternative practice structures.
Background on Peer Review Program
Under the AICPA’s peer review program, enrolled firms undergo a review every three years. The goal is not just to check compliance with professional standards, but also to ensure firms have robust quality systems. Reviews can result in a pass, pass with deficiencies, or fail, so they’re a vital quality guardrail for the profession.
What’s Changing?
A key amendment in the new proposal would require firms operating under non-traditional business models, like private equity or alternative practice structures, to have their peer reviews administered by the AICPA’s National Peer Review Committee, instead of one of the 23 state administering entities. This aims to bring more consistency and higher quality oversight as the profession adapts to new and complex operating models.
Why the Update?
The Peer Review Board’s drive to ‘modernize’ stems from the rise of private equity involvement, growth in alternative practice structures, and increased PCAOB oversight. The profession’s regulatory and practice environments are becoming more complex, so centralized administration is seen as key to maintaining high standards and protecting the public.
Impacts and Expert Input
This proposal gives the Peer Review Board discretion to require certain reviews to go through the National Peer Review Committee, a panel of 15-17 nationally experienced practitioners. Susan Coffey from the AICPA commented that these new business structures bring different risks, and centralized peer reviews will help ensure consistent and appropriate oversight as more firms shift toward private equity models.
Other Proposed Changes
Beyond administration, the proposal also revises qualification standards for peer reviewers working with firms performing or assisting on PCAOB-standard engagements. The intention is to ensure only those with deep familiarity and experience with PCAOB standards join review teams, raising the bar for quality.
Timing and Next Steps
If approved, these revisions will apply to peer reviews for years ending on or after December 31, 2025. The public comment period is short, just two days left, ending on October 25, 2025.
Final Thoughts
This proposal marks a significant step in how the AICPA is responding to industry trends and regulatory demands. For firms with private equity backing or alternative practice structures, staying informed and involved is crucial as these standards evolve.
For more details or to offer your feedback, please refer directly to the AICPA’s proposal before the comment deadline.
Thanks again for tuning in—and if you need further CPE credits or professional development, GLS has you covered!
