Question

Williams & Co., a member of the Private Companies Practice Section, is to have a "peer review." The peer review can be performed by:

a. a CPA firm selected by Williams & Co.
b. a review team selected by the state society.
c. internal auditors.
d. either a or b.

Answer 1

A peer review for Williams & Co. can be conducted by a CPA firm chosen by the company itself or by a review team selected by the state society. Internal auditors are unlikely to be used for this purpose, and the correct choices are 'either a or b'.

Step-by-step explanation:

The student's question relates to who is authorized to perform a peer review for Williams & Co., a member of the Private Companies Practice Section. There are specific options given in the question for who can perform the peer review.

According to the standards set by various accounting and auditing bodies, a peer review typically can be performed by:

• A CPA firm that is selected by the company undergoing the review, which in this case is Williams & Co.
• A review team that is selected by the state society or a similar regulatory or professional body.

Internal auditors are not generally utilized to conduct peer reviews, as peer reviews are meant to be independent evaluations. Therefore, the correct answers, in this case, would be 'either a or b'.