what is an engagement review?
What is an engagement review?
An Engagement Review is the AICPA peer review required for CPA firms whose highest level of service is review or compilation engagements performed under SSARS. The objective is to determine whether selected engagements were performed and reported on in conformity with applicable professional standards. Unlike a System Review, an Engagement Review does not evaluate the firm’s system of quality management.
Engagement Reviews apply to firms that do not issue audits but perform accounting work such as SSARS financial statement reviews and SSARS compilations.
why firms receive an engagement review?
A firm receives an Engagement Review when no audit‑level services are performed during the peer review period. Examples include:
Financial statement reviews under SSARS
Compilation engagements under SSARS
If your firm performs SSARS reviews or compilations—but no audits—an Engagement Review is required.
What the Reviewer Evaluates
During an Engagement Review, the reviewer evaluates selected completed engagements to determine whether they were performed and reported on in conformity with professional standards. Typical evaluation areas include:
Appropriateness of the accountant’s report for the engagement performed
Compliance with SSARS requirements relevant to reviews or compilations
Engagement letters and required communications
Documentation supporting procedures performed and conclusions reached
Financial statement presentation and required disclosures
Independence documentation and ethical requirements where applicable
The reviewer conducts a file‑based evaluation of the engagements selected; the firm’s overall system of quality management is not evaluated in an Engagement Review.
How Engagements Are Selected
Files are chosen to be representative of the firm’s SSARS practice, focusing on engagement types and risk considerations within the period under review. The selection is designed to provide a fair view of whether the engagements, as performed and reported, conformed to professional standards.
outcome of an engagement review
At the conclusion of the review, the firm receives one of three peer review ratings: Pass, Pass with Deficiencies, or Fail. When deficiencies are identified, the administering entity may require corrective actions and, when appropriate, follow‑ups to document remediation and compliance.
A well‑organized SSARS practice—with current methodologies, consistent reporting, and clear documentation—typically experiences a smooth and efficient Engagement Review.
Explore more Peer Review resources
AICPA Peer Review (main) • What Is an System Review? • How to Prepare for an AICPA Peer Review • Common Peer Review Findings