Legislative Auditor Assistance To CPA Firms

Questions:

I am a CPA auditing a local auditee. I cannot get records from the local auditee. What can I do?

Contact LLA’s Engagement Manager. LLA will note in their records that you are having problems getting records from the local auditee. If the local auditee’s refusal to provide its records to you causes its report to be delinquent, its name will go on the noncompliance list on LLA’s website. No state funds will be paid to the agency until its audit report is submitted.
LLA may notify the local auditee by letter of their requirement to provide you with the books and records necessary to perform the engagement, and set a date by which they must provide these records. If the date passes and the local auditee has not provided the records, LLA may notify the district attorney in the judicial district in which the local auditee is domiciled of the local auditee’s noncompliance with the audit law.
LLA may also request that the local auditee appear before the Legislative Audit Advisory Council to explain why it is unable to comply with the audit law.

I am a CPA with an approved engagement to audit a local auditee. The local auditee has informed me that they want to hire another approved CPA firm to perform the engagement. Must I allow the local auditee to cancel the engagement?

An engagement agreement is a contract; and LLA will not withdraw its approval for an engagement agreement unless both the local auditee and the CPA have agreed to cancel it. However, LLA does ask the CPA to keep in mind that if they choose to perform an audit against the wishes of a local auditee, the environment on the audit site may be less than ideal.

I am a CPA who audited a local auditee in the prior year. The local auditee has notified me that they don’t want to hire my firm to perform the current year audit, but they haven’t paid my firm for the prior year audit. What is my recourse?

Whenever LLA receives an engagement approval request that indicates there is a change of CPA for an audit or review/attestation engagement, LLA calls both the local auditee and the prior CPA firm to obtain additional information regarding the reason the local auditee is changing CPA firms. One of the questions LLA asks the prior CPA is if they have been paid for their engagement. LLA will not approve a change of CPA for a local auditee that has not paid their prior CPA.

I am a CPA who audited a local auditee in the prior year. The local auditee has notified me that they don’t want to hire my firm to perform the current year audit. There were a lot of findings in the prior year report, and I think that the local auditee is trying to hire a CPA firm that will write fewer findings. What should I do?

Whenever LLA receives an engagement approval request that indicates there is a change of CPA for an audit or review/attestation engagement, LLA calls both the local auditee and the prior CPA firm to obtain additional information regarding the reason the local auditee is changing CPA firms. One of the questions LLA asks the prior CPA is if there were any disagreements with the local auditee that may have caused them to change CPAs. If there are indications that the local auditee is opinion shopping or attempting to eliminate findings by changing CPA firms, LLA will either not approve the change of CPA; or will approve the change of CPA, but monitor the new engagement closely to ensure that the prior year findings are appropriately addressed by the new CPA firm.

I am a CPA who has a new client. The prior auditor will not provide me with access to the prior year workpapers. What can I do?

Contact LLA’s Engagement Manager for assistance in obtaining access to the prior year workpapers.

I am a CPA performing the audit of a local auditee. I have determined that I need to modify the auditor’s opinion; but I am getting a lot of pressure from the local auditee not to do so. What should I do?

A CPA is required by professional standards to render whatever opinion is warranted based on their audit of an agency’s books and records. LLA generally does not intervene on behalf of a local auditee when there is a disagreement between a CPA and the local auditee over the type of opinion rendered, absent a very good reason. A CPA feels he or she is being pressured to render a different type of opinion than the one supported by their audit work, or has any doubts about the type of opinion that should be rendered, should contact LLA’s Engagement Manager or the Director of Local Government Services.