Compliance Management, Audit and Due Diligence · Peer Review and Quality Review

Peer Review Process and Reporting for Company Secretaries

Updated 11 October 2026 · Fact-checked

Peer review is an independent check of a practice unit's work and quality systems. The process runs in stages: units are selected, a reviewer examines the work and records, a report is prepared, and follow-up action is taken on the findings. In the exam, answer in that order with the facts of the case.

Understand Peer Review Process and Reporting

Peer review is a review of a professional's practice by a fellow professional. The aim is simple: check that the work meets professional standards and that the firm has a sound system to keep quality up. It is a quality tool. It is not a witch hunt.

The official text you have for this topic is SQC 1, the ICAI standard on quality control for firms. It does not lay down the ICSI peer review scheme. So here you learn the logic of any review process, using SQC 1 as the anchor. For ICSI-specific rules on selection of units, the reviewer panel, timelines and the report format, use the current ICSI Peer Review Guidelines. Do not invent figures or form numbers in an answer.

The process has four stages. First, selection: the body decides which units will be reviewed. SQC 1 shows the same idea for firm inspections: individual engagements are selected, and some may be selected without prior notification to the engagement team. Second, conduct: the reviewer discusses with the principal, examines files and working papers on significant judgments, and tests compliance with policies. Third, reporting: the reviewer records findings and conclusions. Fourth, follow-up: the findings lead to action.

Independence is the backbone. SQC 1 says those inspecting engagements are not involved in performing the engagement or the engagement quality control review. The same rule applies to any peer reviewer: no involvement in the unit's work. The review also does not take away the responsibility of the engagement partner. The practitioner stays answerable for the work.

Follow-up is where marks are often won. SQC 1 says that where deficiencies are found, the firm's evaluation should lead to one or more of: remedial action on an engagement or person; communication to those handling training; changes to policies and procedures; and disciplinary action against those who repeatedly fail to comply. If monitoring shows that a report may be inappropriate or that procedures were omitted, the firm decides what further action is needed to comply with standards and law, and considers obtaining legal advice.

Key rules to remember

Four stages of a review: Selection → Conduct → Report → Follow-up; Use this as the skeleton of every answer on the process.
Selection of engagements (SQC 1, para 91): Individual engagements are selected; some without prior notice; The inspectors must not be involved in performing the engagement or its quality control review.
Extent of review (SQC 1, para 64): Extent depends on complexity of the engagement and the risk that the report is inappropriate; Review covers discussion with the partner, the financial statements and report, and selected working papers on significant judgments.
Outcome of deficiencies (SQC 1, para 95): (a) remedial action; (b) tell training heads; (c) change policies; (d) disciplinary action; Recommendations are one or more of these four.
Further action (SQC 1, para 96): Report may be inappropriate or procedures omitted → decide further action; consider legal advice; Needed to comply with standards and legal requirements.
External inspection (SQC 1, para 91): External inspection ≠ substitute for internal monitoring; The firm may consider the external programme in setting scope, but must still monitor itself.

How to solve Peer Review Process and Reporting questions

Use one fixed method for any question on the peer review process, whether it asks for steps, a report, or action on findings.

1Read the question and mark what is asked: process, conduct, report or follow-up.
2State the purpose in one line: independent check of quality and compliance with standards.
3Set out the stages in order: selection, conduct, reporting, follow-up.
4Apply the facts given: who was selected, what the reviewer found, whether independence was kept.
5Give the rule in plain words. Cite SQC 1 paragraph numbers only where you are sure, and refer to the ICSI Peer Review Guidelines for scheme details.
6Conclude with the action: remedial step, training, policy change, or disciplinary action, as the facts require.

Quickest way: Stage-and-action grid

When to use it: Use when time is short or the question is a short note.

Write the four stage names as a one-line header.
Under each stage, write one or two points in your own words.
For findings, list the four follow-up options and pick those that fit the facts.
Add one line on independence of the reviewer and the practitioner's continuing responsibility.

Common mistakes in Peer Review Process and Reporting

Quoting exact timelines, fees or form numbers from memory.
Students want answers to look precise.
Fix: Describe the step in words and refer to the ICSI Peer Review Guidelines. Wrong figures lose marks.
Saying the review shifts responsibility to the reviewer.
The word 'review' suggests someone else now owns the work.
Fix: State that the review does not reduce the responsibility of the engagement partner or practitioner.
Leaving out follow-up.
Students stop once the report is written.
Fix: Always add remedial action, training feedback, policy change and disciplinary action where relevant.
Ignoring reviewer independence.
Students focus only on procedures.
Fix: Say that the reviewer must not have been involved in the work being reviewed.
Treating external inspection as enough.
Students think a regulator's review replaces internal checks.
Fix: Remember that an external programme is not a substitute for the firm's own monitoring.
Giving a theory answer without applying the case facts.
Papers are case-based but students recall notes.
Fix: Use the provision, analysis of facts, conclusion pattern every time.

Worked examples

Example 1

A reviewer finds that a practising company secretary's unit repeatedly failed to follow its own documentation policy, and one certificate may have been issued without required procedures. Advise on follow-up action.

Show the solution

Provision: where deficiencies are found, the evaluation should lead to one or more of remedial action, communication to training heads, policy changes and disciplinary action against repeated non-compliers (SQC 1, para 95).
Facts: the failure is repeated, so disciplinary action is relevant. The documentation policy needs strengthening, so a policy change is relevant.
Facts: a certificate may have been issued without required procedures. Where procedures may have been omitted, the firm must decide further action to comply with standards and law, and consider legal advice (SQC 1, para 96).
Remedial action on the specific engagement is needed, such as redoing the omitted work.

Answer: The unit should take remedial action on the affected engagement, tighten its documentation policy, feed the weakness to training, and take disciplinary action for repeated non-compliance. It should also decide what further action the law requires on the doubtful certificate and consider legal advice.

Example 2

A firm says a recent external inspection of its engagements makes its own monitoring unnecessary this year. Is this correct? Also, can the person who worked on an engagement inspect it?

Show the solution

Provision: the inspection process includes selecting individual engagements, and an independent external inspection programme is not a substitute for the firm's own internal monitoring (SQC 1, para 91).
Analysis: the firm may use the scope or conclusions of the external programme when deciding its own inspection scope, but cannot skip internal monitoring.
Provision: those inspecting engagements are not involved in performing the engagement or the engagement quality control review.
Analysis: a person who worked on the engagement is therefore not eligible to inspect it.

Answer: The firm is wrong. External inspection may inform scope but does not replace internal monitoring. The person who worked on the engagement cannot inspect it, because inspectors must be independent of the work.

Exam tips

Answer in the order selection, conduct, report, follow-up so the examiner sees the process at once.
Cite SQC 1 paragraph numbers only for those you know, such as 64, 91, 95 and 96, and keep the rest in plain words.
For scheme details, name the ICSI Peer Review Guidelines rather than guessing figures or forms.
In case questions, end with a clear conclusion and the action to be taken.
Mention independence of the reviewer and the practitioner's continuing responsibility; they are easy marks.

Practice questions from Peer Review and Quality Review

Peer Review Process and Reporting in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Actuarial Core Principles (IAI)Continuing Professional Development and Peer Review

Peer Review Process and Reporting: frequently asked questions

What are the steps in the peer review process?

The process runs through selection of units, conduct of the review, preparation of the report and follow-up on findings. Write them in that order. For scheme specifics, refer to the current ICSI Peer Review Guidelines.

Can the reviewer have worked on the engagement being reviewed?

No. SQC 1 says those inspecting engagements are not involved in performing the engagement or its quality control review. Independence is essential for a credible review.

What happens if the review finds deficiencies?

The evaluation should lead to one or more of remedial action, communication to training heads, changes to policies, and disciplinary action for repeated non-compliance. If a report may be inappropriate, further action and legal advice should be considered.

Does peer review reduce the practitioner's responsibility?

No. SQC 1 states that a quality control review does not reduce the responsibilities of the engagement partner. The practitioner remains answerable for the work.