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¶ … performance indicators and internal budget controls like reviewing staff hours can be used to assess individual and organizational accountability. Strict AICPA standards are required for the peer-review process. In addition, internal budget controls are also effective performance indicators.
The American Institute of Certified Public Accountants (AICPA) has published extensive and strict guidelines regarding the CPA peer review process (AICPA). The standards for membership in the AICPA are strict, "to retain their membership in the American Institute of Certified Public Accountants (AICPA) members of the AICPA who are engaged in the practice of public accounting in the United States or its territories are required to be practicing as partners or employees of firms enrolled in an approved practice-monitoring program..."
In accordance with the AICPA standards, the firm will chose a single, qualified CPA from a list provided by the AICPA to conduct a peer review. This person will review working conditions, including interviews regarding current issues on tax or accounting-related matters. This peer-review process will also ensure that all firm employees continue further education.
Internal budget controls are also important performance indications within a CPA firm. These controls go beyond the peer-review process, and include a number of measures designed to improve employee efficiency.
The firm will review each staff member's chargeable hours each quarter as part of the internal budget controls. This will ensure that employees are working as efficiently as possible. The target is to have staff produce 1.5 chargeable hours of their salary. For example, if a staff member earns $1,000 per month, the goal is to have them produce $2,500 in chargeable hours.
In addition, these internal controls will include individual staff interviews. These interviews will be designed to see if the employee is experiencing specific difficulties that can be addressed.
In summary, this firm will use both a peer review and an internal budget control as performance indicators. These indicators will ensure that the company is working as efficiently as possible, and adhering to AICPA codes of conduct.
References
IACPA. Standards for Performing and Reporting on Peer Reviews. 23 October 2003. http://www.aicpa.org/members/div/practmon/stdstitle.htm
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