(a) The board shall establish a peer review oversight committee for the purpose of:

Terms Used In Hawaii Revised Statutes 466-42

  • Attest: means providing the following financial statement services:

    (1) Any audit or other engagement to be performed in accordance with the statements on auditing standards of the American Institute of Certified Public Accountants;

    (2) Any compilation or review of a financial statement to be performed in accordance with the statements on standards for accounting and review services of the American Institute of Certified Public Accountants;

    (3) Any examination of prospective financial information to be performed in accordance with the statements on standards for attestation engagements of the American Institute of Certified Public Accountants;

    (4) Any engagement to be performed in accordance with the government auditing standards, also known as the Yellow Book, issued by the United States Government Accountability Office; and

    (5) Any engagement to be performed in accordance with the standards of the Public Company Accounting Oversight Board. See Hawaii Revised Statutes 466-3

  • Board: means the state board of public accountancy established under § 466-4. See Hawaii Revised Statutes 466-3
  • Certified public accountant: means the designation given to a person licensed under § 466-5 or the law of any other state or foreign country. See Hawaii Revised Statutes 466-3
  • Discovery: Lawyers' examination, before trial, of facts and documents in possession of the opponents to help the lawyers prepare for trial.
  • Firm: means a sole proprietorship, a corporation, a partnership, a limited liability company, or a limited liability partnership. See Hawaii Revised Statutes 466-3
  • Oversight: Committee review of the activities of a Federal agency or program.
  • Partner: means a partner in any general partnership, foreign general partnership, limited liability partnership, or foreign limited liability partnership. See Hawaii Revised Statutes 466-3
  • Peer review: means a study, appraisal, or review of one or more aspects of the professional work of a firm that issues attest reports by a person or persons who hold permits to practice public accountancy under § 466-7 or are licensed to practice public accountancy in any other state and who are not affiliated with the firm being reviewed. See Hawaii Revised Statutes 466-3
  • Practice of public accountancy: means the performance or the offering to perform, by a person or firm holding itself out to the public as a licensee, for a client or potential client of one or more kinds of services involving the use of accounting or auditing skills, including the issuance of reports on financial statements, or of one or more kinds of management advisory or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters. See Hawaii Revised Statutes 466-3
  • Rating: means the type of report issued following a peer review. See Hawaii Revised Statutes 466-31
  • Report: when used with reference to financial statements, means an opinion, report, or other form of language that states or implies the measure of assurance as to the reliability of any financial statements, and that also includes, or is accompanied by, any statement or implication that the firm issuing it has special knowledge or competence in accounting or auditing. See Hawaii Revised Statutes 466-3
  • Sponsoring organization: means a third-party entity that meets the standards specified by this part for administering a peer review. See Hawaii Revised Statutes 466-31
  • State: means any state, territory, or insular possession of the United States, except that "this State" means the State of Hawaii. See Hawaii Revised Statutes 466-3
(1) Monitoring sponsoring organizations to ensure that peer reviews are being conducted and reported in accordance with standards for performing and reporting on peer reviews adopted by the American Institute of Certified Public Accountants Peer Review Board;
(2) Reviewing the policies and procedures of sponsoring organization applicants as to their conformity with the peer review standards of any applicable peer review organization and this part; and
(3) Reporting to the board on the conclusions and recommendations reached as a result of performing the functions in paragraphs (1) and (2).
(b) Except to the extent otherwise required under this section and section 466-41(b), information concerning a specific firm or reviewer obtained by the peer review oversight committee during oversight activities shall be confidential and shall not be subject to discovery, pursuant to section 466-32, and reports submitted to the board by the peer review oversight committee shall not contain information concerning specific firms or reviewers. Members of the peer review oversight committee shall be required to execute confidentiality statements for the sponsoring organization that they oversee.
(c) The peer review oversight committee shall consist of three individuals approved by the board who hold permits to practice under § 466-7 and who are currently in the practice of public accountancy at the partner or equivalent level. No member of the peer review oversight committee shall be a current member of the board, the Hawaii Society of Certified Public Accountants Peer Review or Professional Ethics Committees, or the American Institute of Certified Public Accountants Professional Ethics Executive Committee. In selecting committee members, the board shall consider, among other things, the prospective member’s experience with attest engagements and the peer review rating of the prospective member’s firm.
(d) The peer review oversight committee shall make an annual recommendation to the board as to the qualifications of an approved sponsoring organization to continue as an approved sponsoring organization on the basis of the results of the following procedures:

(1) Where the sponsoring organization is:

(A) The American Institute of Certified Public Accountants;
(B) A state certified public accountant society, including the Hawaii Society of Certified Public Accountants, fully involved in administering the American Institute of Certified Public Accountants peer review program; or
(C) The public company accounting oversight board,

the peer review oversight committee shall review the published reports of the entity or the entity’s successor to determine whether there is an acceptable level of oversight; and

(2) Where the sponsoring organization is other than any organization listed in paragraph (1), the peer review oversight committee shall perform the following functions:

(A) At least one member of the peer review oversight committee shall attend at least one meeting of the sponsoring organization’s peer review committee; and
(B) During these visits, the peer review oversight committee members shall:

(i) Meet with the organization’s peer review committee during the committee’s consideration of peer review documents;
(ii) Evaluate the organization’s procedures for administering the peer review program;
(iii) Examine, on the basis of a random selection, a number of reviews performed by the organization to include, at a minimum, a review of the report on the peer review, the firm’s response to the matters discussed, the sponsoring organization’s letter of acceptance outlining any additional corrective or monitoring procedures, and the required technical documentation maintained by the sponsoring organization on the selected reviews; and
(iv) Expand the examination of peer review documents if significant deficiencies, problems, or inconsistencies are encountered during the analysis of the materials.
(e) In the evaluation of policies and procedures of sponsoring organization applicants, the peer review oversight committee shall:

(1) Examine the policies as drafted by the applicant to determine whether the policies provide reasonable assurance of conforming to the standards for peer reviews;
(2) Evaluate the procedures proposed by the applicant to determine whether:

(A) Assigned reviewers are appropriately qualified to perform the review for the specific firm;
(B) Reviewers are provided with appropriate materials;
(C) The applicant has provided for consultation with the reviewers on problems arising during the review and that specified occurrences requiring consultation are outlined;
(D) The applicant has provided for the assessment of the results of the review; and
(E) The applicant has provided for an independent report acceptance body that considers and accepts the reports of the review and requires corrective actions by firms with significant deficiencies; and
(3) Make recommendations to the board as to approval of the applicant as a sponsoring organization.
(f) Annually, the peer review oversight committee shall provide the board with a report on the continued reliability of sponsoring organizations’ peer reviews. The peer review oversight committee report shall provide reasonable assurance that peer reviews are being conducted and reported on consistently and in accordance with the Standards for Performing and Reporting on Peer Review adopted by the American Institute of Certified Public Accountants. A summary of oversight visits shall be included with the annual report.
(g) The members of the peer review oversight committee shall serve without compensation, but shall be reimbursed for necessary expenses, including travel expenses, that are incurred in the performance of their duties.
(h) No member of the peer review oversight committee shall bear any civil liability for any action taken as a member of the peer review oversight committee in furtherance of the purposes for which the peer review oversight committee was established.

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