N.M. Admin. Code § 2.2.2.14

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

Section 2.2.2.14 - CONTINUING PROFESSIONAL EDUCATION AND PEER REVIEW REQUIREMENTS

A.Continuing professional education: IPAs performing annual financial and compliance audits, or other attest engagements under GAGAS shall ensure that all members of their staff comply with the CPE requirements of the most recent revision of GAGAS.

B.Peer review requirements: IPAs performing annual financial and compliance audits, or other attest engagements under GAGAS shall comply with the requirements of the most recent revision of GAGAS relating to quality control and assurance and external peer review.

(1) An audit firm's due date for its initial peer review is 18 months from the date the firm enrolled in the peer review program or should have enrolled, whichever is earlier. A firm's subsequent peer review is due three years and six months from the previous peer review year end.

(2) The IPA firm profile submission to the state auditor shall include copies of the following peer review documentation:

(a) the peer review report for the auditor's firm;

(b) if applicable, detailed descriptions of the findings, conclusions and recommendations related to deficiencies or significant deficiencies required by GAGAS 5.91;

(c) if applicable, the auditor's response to deficiencies or significant deficiencies;

(d) the letter of acceptance from the peer review program in which the firm is enrolled; and

(e) a list of the governmental audits reviewed during the peer review.

(3) A peer review rating of "failed" on the auditor's peer review shall disqualify the IPA from performing New Mexico governmental audits.

(4) During the procurement process IPAs shall provide a copy of their most recent external peer review report to the agency with their bid proposal or offer. Any subsequent peer review reports received during the period of the contract shall also be provided to the agency.

(5) The peer review shall meet the requirements of GAGAS 5.60 to 5.95.

(6) The peer reviewer shall be familiar with this rule. This is a requirement of the state auditor that can be achieved by attendance at audit rule training provided by the OSA.

C.State auditor quality control reviews: The state auditor performs its own quality control review of IPA audit reports and working papers. An IPA that is included on the state auditor's list of approved firms for the first time may be subject to an OSA quality control review of the IPA's working papers. This review shall be conducted as soon as the documentation completion date, as defined by AU-C Section 230, has passed (60 days after the report release date). When the result of the state auditor's quality control review differs significantly from the external quality control report and corresponding peer review rating, the state auditor may no longer accept external peer review reports performed by that reviewer. In making this determination, the state auditor shall take into consideration the fact that AICPA peer reviews are performed on a risk-based or key-element approach looking for systemic problems, while the state auditor reviews are engagement-specific reviews.

D.SOC Audit qualifications: The OSA requires any firm or IPA contracting with an agency or LPB to conduct a SOC 1 or SOC 2 Audit engagement to have the following proof of qualifications: Firms must have a SOC engagement peer review rating of pass to qualify for a SOC engagement.

N.M. Admin. Code § 2.2.2.14

2.2.2.14 NMAC - Rp, 2.2.2.14 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, Amended by New Mexico Register, Volume XXXV, Issue 13, July 16, 2024, eff. 7/16/2024