Turning Peer Review Feedback into Better Audit Systems

For many small firms, the words peer review bring up one of two emotions: anxiety or relief.

If it went well—great. If it didn’t, it probably left you questioning how you’ll handle it all again next cycle.
But here’s something we don’t talk about enough:

 

Peer review isn’t just a compliance exercise. It’s an opportunity to strengthen your systems.

That’s right. The notes you get back—whether they’re minor comments or major findings—can help you build a smarter, smoother, more scalable firm.

You just have to know how to translate feedback into action.

1. Shift Your Mindset: It’s Not About Fault—It’s About Fixes

The purpose of peer review isn’t to call you out—it’s to lift the entire profession. The reviewers aren’t looking for perfection; they’re looking for consistency, documentation, and clarity.

You’re not being graded. You’re being guided.
And if your firm is small or new? Every piece of feedback is a shortcut to better systems.

2. Break Down the Comments by Category

Start by organizing the feedback you received. Most peer review notes fall into one of these buckets:

🔹 Missing or Weak Documentation

Example: No support for risk assessment, incomplete understanding of internal controls.

🔹 Inadequate Linkage Between Risk and Response

Example: Procedures don’t reflect identified risks, or same audit program is used year after year.

🔹 Workpaper Issues

Example: No evidence of review, unclear tie-outs, inconsistent formatting or conclusions.

🔹 Financial Statement or Disclosure Errors

Example: Incorrect or incomplete GASB disclosures, outdated note language.

🔹 Independence or Quality Control Observations

Example: No documented review process, lack of system to monitor compliance with standards.

Once sorted, you can start building targeted systems to address them.

3. Turn Findings into Templates, Checklists, and Processes

Here’s where the magic happens: instead of making case-by-case fixes, use the feedback to build or refine your systems.

✅ Examples:

📄 Weak documentation of risk assessments?
→ Build a standardized risk assessment worksheet tied to your planning memo.

📄 Disclosure issues?
→ Create a disclosure library with editable templates and required elements for GASB statements.

📄 Review notes missing?
→ Implement a review checklist with sign-off fields for each major audit area.

📄 Control walkthroughs unclear?
→ Develop a walkthrough template for cash disbursements, payroll, and journal entries—include space for examples and who performs each task.

Systematizing what was inconsistent is the fastest way to ensure the next review goes smoother—and your audit quality improves across the board.

4. Loop in Your Team (Even if It’s Just One Other Person)

If you have staff or contract help, don’t keep peer review feedback to yourself. Turn it into a teaching moment.

✅ Try this:

• Walk through one finding per week in a team meeting.

• Share your new templates or updated process.

• Explain why the change matters—not just what to do differently.

When your team understands the standards behind the systems, they’re more likely to use them correctly—and help you improve them over time.

5. Document the Fixes—Not Just the Files

Keep a record of how you responded to each peer review point.
This isn’t just for next time—it shows your commitment to quality, and it reinforces your internal QC system.

✅ Maintain a simple tracking sheet:

• Peer review comment

• Your fix or new template

• Implementation date

• Where it lives (folder, platform, checklist, etc.)

This turns your review into a roadmap—and makes your firm more resilient in the long run.

Your Peer Review Is a Mirror—Use It to Build Forward

It’s easy to see peer review as a hurdle. But what if it’s a springboard?

The firms that improve the fastest aren’t the biggest.
They’re the ones who see feedback as fuel.

Start with one system. One checklist. One template.
Improve it, test it, and use it again.

Because better systems don’t just help you pass review.
They help you train better, delegate more, and build a firm that lasts.