10:15-33-2. Special definitions 

Link to law: http://www.oar.state.ok.us/viewhtml/10_15-33-2.htm
Published: 2015

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10:15-33-2. Special definitions 

     The following words and terms used in this subchapter shall have the following meanings, unless the context clearly indicates otherwise.

"Deficiency"in a system review means one or more findings that the peer reviewer has concluded that due to the nature, causes, pattern, or pervasiveness, including the relative importance of the finding to the reviewed firm's system of quality control taken as a whole, could create a situation in which the firm would not have reasonable assurance of performing and/or reporting in conformity with applicable professional standards in one or more important respects. It is not a significant deficiency if the peer reviewer has concluded that except for the deficiency or deficiencies, the reviewed firm has reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects.

"Deficiency" in an engagement review is one or more findings that the review captain concludes are material to the understanding of the financial statements or information and/or related accountant's reports or that represent omission of a critical procedure, including documentation, required by applicable professional standards. When the review captain concludes that deficiencies are not evident on all of the engagements submitted for review, or when the exact same deficiency occurs on each of the engagements submitted for review and there are no other deficiencies, such deficiencies are communicated in a report with a peer review rating of pass with deficiencies.

"Deficient report"means any report which is pass with deficiencies or fail.

"Engagement Review"means a peer review where the peer reviewer evaluates and reports on whether engagements submitted for review by the practice unit are performed and reported on in conformity with applicable professional standards in all material respects.

"Fail" on a system review (audit is highest level of service) means significant deficiencies have been identified and the firm's system of quality control is not suitably designed to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects or the firm has not complied with its system of quality control to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Fail on an engagement review means the engagements submitted for review were not performed and/or reported in conformity with applicable professional standards in all material respects. A fail report with deficiencies related specifically to compilations would not be considered deficient for the purposes pursuant to these rules.

"Pass" on a system review means the reviewed firm's system of quality control for the accounting and auditing practice has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Pass on an engagement review means nothing came to the reviewer's attention that the engagements submitted for review were not performed and reported in conformity with applicable professional standards in all material respects.

"Pass with deficiencies" on a system review means the design of the firm's system of quality control for the accounting and auditing practice has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects with the exception of a certain deficiency or deficiencies that are described in the report. Pass with deficiencies on an engagement review means that nothing came to the attention of the reviewer that caused him/her to believe that the engagements submitted for review were not performed and reported on in conformity with applicable professional standards in all material respects except for the deficiencies that are described in the report. A pass with deficiencies report with deficiencies related specifically to compilations would not be considered deficient for the purposes pursuant to these rules.

"Peer review due date" must be a date within six (6) months after the peer review year end, plus any extensions granted by the sponsoring organization or the Board.

"Peer review program"means a board-approved study, appraisal, or review of one or more aspects of the attest or compilation work of a permittee or licensee of a registered firm in the practice of public accounting, by a person or persons who hold licenses in this or another jurisdiction and who are not affiliated with the person or firm being reviewed.

"Peer review year end" means the year end as determined by the firm and its reviewer.

"Performance of services" is deemed to start when an engagement letter is signed or agreement reached.

"Review year" means the peer review covers a one-year (twelve-month) period. Engagements selected for peer review normally would have periods ending during the year under peer review.

"Significant deficiency"in a system review means one or more deficiencies that the peer reviewer has concluded results from a condition in the reviewed firm's system of quality control or compliance with it such that the reviewed firm's system of quality control taken as a whole does not provide the reviewed firm with reasonable assurance of performing and/or reporting in conformity with applicable professional standards in all material respects.

"Significant deficiency"in an engagement review means the review captain concludes that all engagements submitted for review were not performed and/or reported on in conformity with applicable professional standards in all material respects. The exception is when more than one engagement has been submitted for review, the exact same deficiency occurs on each of those engagements, and there are no other deficiencies, which ordinarily would result in a report with a peer review rating of pass with deficiencies.

"Sponsoring organization" means a Board-approved professional society, or other

organization responsible for the facilitation and administration of peer reviews through use of its peer review program and peer review standards. The Board shall periodically publish a list of sponsoring organizations, which have been approved by the Board.

"System Review"means a peer review intended to provide the peer reviewer with a reasonable basis for expressing an opinion on whether, during the year under review: a) the reviewed practice unit's system of quality control for its accounting and auditing practice has been designed in accordance with quality control standards and b) the reviewed practice unit's quality control policies and procedures were being complied with to provide the practice unit with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects.

[Source: Added at 21 Ok Reg 1981, eff 7-1-04; Amended at 22 Ok Reg 1691, eff 7-1-05; Amended at 23 Ok Reg 2123, eff 7-1-06; Amended at 25 Ok Reg 1513, eff 7-1-08; Amended at 31 Ok Reg 710, eff 9-12-14]