N.M. Admin. Code § 2.2.2.13

Current through Register Vol. 35, No. 21, November 5, 2024

Section 2.2.2.13 - REVIEW OF AUDIT REPORTS AND AUDIT DOCUMENTATION

A.Statutory requirement to review audit reports: Subsection B of Section 12-6-14 NMSA 1978 requires the state auditor or personnel of the office designated by the state auditor to examine all reports of audits of agencies made pursuant to contract. All audits performed under contracts approved by the state auditor are subject to review. The OSA shall review all reports submitted by the IPA to determine if the reports are presented in accordance with the requirements of this rule and applicable auditing, accounting and financial reporting standards. The OSA shall review all audit reports submitted by the report due date before reviewing reports that are submitted after the report due date. As discussed in Subsection B of 2.2.2.9 NMAC, audit reports reissued by the agency and IPA, pursuant to AU-C 560, are also subject to OSA review procedures.

B.Comprehensive reviews: Released audit reports are subject to a comprehensive report and audit documentation review by the state auditor. The IPA's audit documentation shall be assembled in one complete file or one complete set of files in one location, whether the documentation is hardcopy or electronic. The documentation shall be either all hardcopy or all electronic. OSA reviews of audit and AUP working papers include inspection of firm documentation related to compliance with governmental auditing, accounting and financial reporting standards, rules and other requirements issued by GASB, AICPA, GAO, and the OSA.

C.Consequences of deficiencies: If during the course of its review of an audit report or the related audit documentation, the OSA finds significant deficiencies that warrant a determination that the audit was not made in accordance with the provisions of the contract or applicable standards and requirements, any or all of the following action(s) may be taken;

(1) the IPA may be required by OSA to correct the deficiencies in the report or audit documentation, and reissue the audit report to the agency and any others receiving copies;

(2) the IPA's eligibility to perform future engagements may be limited in number or type of engagement pursuant to Subsection D of 2.2.2.8 NMAC;

(3) for future audit reports, for some or all audit contracts,the IPA may be required to submit working papers with the audit reports for review by the OSA prior to the release of the report; or

(4) the IPA may be referred to the New Mexico public accountancy board for possible licensure action.

D.Results of work paper reviews: After the review is completed, the OSA shall issue a letter to advise the IPA about the results of the review. The IPA shall respond in writing to all review comments when directed. If the firm disagrees with any comments, the firm shall provide references to professional standards supporting the firm's disagreement. Failure to respond shall be noted during the firm profile review process. Results of work paper reviews are confidential audit documentation.

N.M. Admin. Code § 2.2.2.13

2.2.2.13 NMAC - Rp, 2.2.2.13 NMAC, 2-28-14, Adopted by New Mexico Register, Volume XXVI, Issue 05, March 16, 2015, eff. 3/16/2015, Adopted by New Mexico Register, Volume XXVII, Issue 05, March 15, 2016, eff. 3/15/2016, Adopted by New Mexico Register, Volume XXVIII, Issue 05, March 14, 2017, eff. 3/14/2017, Adopted by New Mexico Register, Volume XXIX, Issue 04, February 27, 2018, eff. 2/27/2018, Adopted by New Mexico Register, Volume XXXI, Issue 05, March 10, 2020, eff. 3/10/2020, Adopted by New Mexico Register, Volume XXXII, Issue 06, March 23, 2021, eff. 3/23/2021, Adopted by New Mexico Register, Volume XXXIII, Issue 06, March 22, 2022, eff. 3/22/2022, Adopted by New Mexico Register, Volume XXXIV, Issue 06, March 28, 2023, eff. 3/28/2023