K.S.A. 1-501
1-501. Quality review or peer review; condition for
renewal of permit to practice; purpose; time; cost; alternative program;
criteria; remedial program; revocation or suspension of permit, when; waiver,
conditions; actions and reports privileged, when.
(a) The
board may require as a condition for renewal of a firm registration that a firm
that provides attest services undergo a peer review and submit evidence of such
so that the board may determine the degree of the firm’s compliance with
generally accepted accounting principles, generally accepted auditing standards
and other similarly recognized authoritative technical standards. The reviews shall occur at least once every
three years with the cost of such review to be borne by the firm.
(b) A firm’s completion of a peer
review program endorsed or supported by the AICPA or other substantially
similar programs shall satisfy the requirements of this section. The board shall provide for oversight of these
programs by adoption of rules and regulations.
(c) A firm at the time of application, may request in writing upon forms provided by
the board, a waiver from the review requirement. The board may grant a waiver if the firm does
not perform or has not performed any attest services during the twelve-month
period preceding the date of application or for good cause as determined by the
board.
A firm granted a waiver on the basis that
the firm does not perform or intend to perform attest services shall immediately
notify the board if the firm engages in such practice and thus becomes subject
to the review.
(d) Except as provided by K.S.A.
60-437, and amendments thereto, and subsections (e) and (g) of this section,
any reports, statements, memoranda, transcripts, findings, records, or working
papers prepared and any opinions formulated, in connection with any peer review
shall be privileged and shall not be subject to discovery, subpoena or other
means of legal compulsion for their release to any person or entity or be
admissible in evidence in any judicial or administrative proceeding, except
that such privilege shall not exist when the material in question is involved
in a dispute between a reviewer and the person or firm being reviewed.
(e) Nothing in subsection (d) shall
limit the authority of the board to require a person whose work is the subject
of a peer review or a firm to provide a copy of an adverse or modified peer
review report and any responses to report deficiencies from the person or firm
and any document identifying follow-up requirements for the purpose of
determining the person’s or firm’s compliance with generally accepted
accounting principles, generally accepted auditing standards and other
similarly recognized authoritative technical standards, provided however, the
board may not request or require a person or firm subject to a peer review to
provide a peer review report or any other document contained in this section
unless the peer review report has been accepted by a report acceptance
committee under the peer review program after December 31, 2001.
(f)
After considering AICPA standards on peer review, the board may define,
by rules and regulations, the terms “modified” and “adverse”.
(g) In any proceeding before the
board in which discussion or admission into evidence of peer review report
documents identified in subsection (e) is proposed, the board or presiding
officer shall conduct that portion of the proceeding in closed session. In closing a portion of such proceeding, the
board or presiding officer may exclude any person from the proceeding except
the person whose work is the subject of peer review, members of the permit
holder’s firm, the attorneys representing the parties, the board’s attorneys,
necessary witnesses and a court reporter.
The board or presiding officer shall make the portions of the agency
record in which such documents are disclosed subject to a protective order
prohibiting further disclosure.
Documents that are privileged under subsection (d) and that are considered
during a closed proceeding shall not be subject to discovery, subpoena or other
means of legal compulsion for their release to any person or entity. No person in attendance at a closed portion
of such proceeding shall at a subsequent civil, criminal or administrative
hearing, be required to testify regarding the existence or content of a
document privileged under subsection (d) which was disclosed in a closed
portion of a proceeding, nor shall such testimony be admitted into evidence in
any subsequent civil, criminal or administrative hearing. All other evidence shall be presented as part
of the proceeding in an open meeting.
Offering any testimony or records in the open portion of a proceeding
shall not be deemed a waiver of the peer review privilege created in subsection
(d).
(h) No person who participates in
the conduct of any peer review within the scope of this section shall be liable
in damages to any person for any action taken or recommendation made in
connection with the peer review process.