Peer Review

Engagement Review - Sample Letter of Response

The purpose of a letter of response is to describe the actions the firm has taken or will take to prevent the recurrence of each matter discussed in the letter of comments. The letter of response should be carefully prepared because of the important bearing it may have on the decisions reached in connection with acceptance of the review report.

If the reviewed firm disagrees with one or more of the findings or recommendations in the letter of comments, its response should describe the reasons for such disagreement.

The letter of response should be submitted to the reviewer for comment prior to submitting the response to the PICPA. If the firm has received a modified or adverse report, the firm's responses should be separated between those findings that resulted in a modified or adverse report and those that did not.

Sample Letter of Response

Month date, 20xx

(Address to PICPA)

Ladies and Gentlemen:

This letter represents our (the response should use the singular I, me, and my only when the reviewed firm is a sole practitioner) response to the letter of comments on the engagement review of our firm's accounting practice for the year ended [month date, 20xx].

To prevent the recurrence of the disclosure deficiencies noted by the reviewer and to prevent other disclosure deficiencies from occurring, we have obtained copies of the AICPA reporting and disclosure checklists. These checklists will be completed on all review engagements and on all compilation engagements.

We have established procedures to ensure that our reports and the computer-generated compiled financial statements prepared on a basis of accounting other than generally accepted accounting principles reflect the appropriate titles.

We believe these actions are responsive to the findings of the review.

Sincerely,

(Name of firm)