For many CPAs, peer review feels like an administrative chore: something to schedule, pay for, and check off every few years. The California Board of Accountancy (CBA) sees it very differently. To the Board, peer review is a core public protection, and a firm that misses it is treated as a serious disciplinary matter, not a paperwork problem.

We recently reviewed a series of CBA decisions involving peer review violations. The results are remarkably consistent, and they should get the attention of every firm that performs audits, reviews, or compilations.

What Peer Review Requires

Under Business and Professions Code section 5076 and the Board’s regulations, California firms that perform accounting and auditing work, such as audits, reviews, and compilations, must undergo a peer review through a Board-recognized program on a regular cycle and report the results to the CBA. The firm’s owners are responsible for making sure that happens.

Problems typically arise when a firm keeps performing attest work but never enrolls in a peer review program, lets its review lapse, fails to complete corrective actions, or is dropped by the peer review program, and then fails to tell the Board.

What the Board Consistently Seeks

Across the decisions we reviewed, a clear pattern emerged:

• Probation is the floor. In every case where the CPA kept a license, the result was stayed revocation and three years’ probation. We did not see a single peer review case resolved with a citation, a public reproval, or a dismissal.
• Attestation bans are common. Many licensees were permanently barred from performing audits or other attest work, even after probation ended.
• Costs and penalties add up. Licensees were ordered to repay the Board’s investigation and prosecution costs, which ranged from a few thousand dollars to more than $18,000, and administrative penalties were frequently added.
• The firm goes down with the owner. When the firm’s own license or registration was named, it received the same discipline as its owner, up to revocation or surrender.
• Some cases include suspension. Even a negotiated settlement can include an actual suspension from practice.

When It Gets Worse

The most severe outcomes, outright revocation or surrender of the license, followed a few recurring mistakes:

• Ignoring the Accusation. A licensee who does not file a Notice of Defense on time can lose the license by default, without ever being heard.
• Repeating the violation on probation. Licensees placed on probation who then failed to complete the peer review required by their probation terms lost their licenses.
• Adding other problems. Where the Board also proved willful conduct, false statements about peer review, or negligent audit work, revocation was the result.

Prior discipline is also a significant aggravating factor. A CPA with a prior record should expect the Board to start at probation and push from there.

Practical Steps for CPAs and Firms

• Know your firm’s peer review due date and calendar it well in advance.
• If your firm performs any audits, reviews, or compilations, confirm you are enrolled with a Board-recognized peer review program.
• Respond promptly to your peer review program and complete any required corrective actions.
• If you stop performing attest work or plan to retire, handle the transition properly with the Board rather than simply letting things lapse.
• If you receive a letter from the Board or an Accusation, contact counsel immediately. Deadlines are short, and missing them can be fatal to your license.

We Can Help

Peer review cases are winnable to a point: good mitigation evidence, early engagement, and a clear plan can shape the terms of a resolution. But the Board’s consistent approach means CPAs should approach these cases with a realistic view of what is at stake. Simas & Associates represents CPAs and accounting firms in CBA investigations, Accusations, and settlement negotiations throughout California. If you have questions about peer review compliance or a pending Board matter, call us at (805) 547-9300 or email info@simasgovlaw.com.

This post is general information, not legal advice. Every situation is different, so please talk with counsel about your specific circumstances.