Louisiana Governmental Audit Guide

For CPA Firms

CPA Firm Approval (400-1010)

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DISCLAIMER
The Louisiana Governmental Audit Guide (LAGAG) is authorized by Louisiana Revised Statute 24:513 A. (5) (a) (i) to set forth the standards by which the engagements of local governments and quasi-public organizations (local auditees) are to be performed. The LAGAG is jointly produced by the Louisiana Legislative Auditor (LLA) and the Society of Louisiana Certified Public Accountants.

Although the LAGAG is intended to assist CPAs in performing their audits and other engagements for local auditees, it does not include a detailed analysis of the professional auditing and accounting standards a CPA must consider during his or her audit, review/attestation or compilation engagements; nor is it a substitute for professional judgment. CPAs must reach their own conclusions through research of all applicable auditing and accounting standards, in addition to the LAGAG, in the performance of their local auditee engagements.

In addition, although the LAGAG is intended to assist local auditees, it does not include all of the legal and accounting information an agency needs to perform its operations; nor is it a substitute for professional, legal or accounting advice; or professional or personal judgment. Local auditees should use the information in the LAGAG, in conjunction with the guidance of the professionals most familiar with the particular facts and circumstances regarding their agency, in the performance of their operations.

For questions and comments about the LAGAG, please contact LLA at (225) 339-3800.


The majority of audit, review/attestation and compilation engagements of local government and quasi-public organizations in Louisiana (local auditees) LLA LaGAG are performed by CPA firms that have been approved by the Louisiana Legislative Auditor (LLA).

In order to ensure the quality of these engagements, and the credentials of the CPA firms performing them, LLA requires CPA firms to provide certain information prior to initial approval of the firm.

All requests to approve a new CPA firm are sent to LLA’s Engagement Manager LLA LaGAG. The following information must be provided to the Engagement Manager to approve a new CPA firm:
      · A written confirmation that the firm understands that engagements of local auditees are to be performed in accordance with all applicable standards and the provisions of the Louisiana Governmental Audit Guide LLA LaGAG.
      · A written confirmation that the firm has reviewed the independence standards of Government Auditing Standards and the Louisiana Governmental Audit Guide LLA LaGAG, and understands that they will not be able to supply prohibited nonaudit services to local auditees, nor be politically involved with the management of any local auditee.
      · A copy of the firm’s most recent peer review LLA LaGAG report, to include any letter of comments, findings for future consideration, or deficiencies issued in conjunction with the peer review.
      · The scheduled date of the firm’s next peer review.
      · If the firm has not received its first peer review, a copy of the letter from the firm’s peer review oversight authority (state board of accountancy program or the AIPCA), confirming that the firm is enrolled in its peer review program; and the scheduled date of the firm’s first peer review.
      · A written confirmation that the firm is either (1) a firm that is domiciled or has a principal place of business in the state of Louisiana that is in compliance with Louisiana CPA licensing and firm permit requirements; or (2) a firm that is not domiciled and does not have a principal place of business in the state of Louisiana that meets the provisions of the Louisiana Accountancy Act for non-resident firms providing attest services to Louisiana-based clients. For further information regarding these requirements, please contact the State Board of Certified Public Accountants of Louisiana.
      · A written confirmation that during the last ten years, the firm or its personnel have not been the subject of a disciplinary action by any state board of accountancy or other regulatory body (including but not limited to federal and state grantor agencies) due to noncompliance with the rules and regulations of the regulatory body. If the firm has been the subject of such a disciplinary action, it must provide a copy of the notification letter it received from the regulatory body that describes the noncompliance and any disciplinary actions taken against the firm or its personnel by the regulatory body; and a statement describing how the firm has or is addressing and rectifying the matter of noncompliance, if applicable.
      · A listing of all professional staff, identifying for each:
        Ø Whether the individual is a licensed certified public accountant.
        Ø Whether the individual is a member of the AICPA.
        Ø Whether the individual is a member of the LCPA.

      · The name(s) of the person(s) who will act as lead auditor(s) on audits for which LLA has oversight, and the following information for each person named:
        Ø The CPE programs completed during the current year and for the last two preceding calendar years, identifying the associated CPE hours.
      · If members of the firm have not completed any CPE programs directly related to the government environment and to government auditing in the last two years, LLA requires that members of the firm who will be working on governmental engagements to complete at least 24 hours of such CPE by the date the reports for the anticipated engagements are due. The firm is required to identify, for each affected individual, the government related CPE programs scheduled to be completed; and to identify the programs by name, scheduled date, and related number of CPE hours.
      · If the CPA firm wishes to perform compilation engagements only, they are asked to advise LLA when requesting approval for the firm. CPA firms performing compilation engagements are required to obtain the continuing professional education sufficient to perform compilation engagements in a competent manner in accordance with all applicable standards.
      · A listing of the professional services provided by the firm. and a statement as to whether the firm specializes in a particular service
      · Whether the firm is local, regional, or national
      · A listing of all engagements that the firm has performed under Government Auditing Standards in the preceding two years, to include the following information:
        Ø The agency’s name and address.
        Ø The agency’s primary contact and telephone number.
        Ø The period covered by the engagement.

      · The CPA is asked to indicate whether their firm is interested in performing audit, review/attestation, and compilation engagements of state agencies and, if so, to provide the firm’s tax identification number.
      · The CPA is asked to indicate whether the firm is owned and operated by a minority.
      · The CPA is asked if they would like for firm’s name, location, telephone number, and fax number to appear on LLA’s website.
      · The CPA is asked for the firm’s physical and mailing address, telephone and fax numbers, and the individual CPA contacts’ e-mail addresses.

The CPA firm is notified by letter if their firm is approved, not approved, or conditionally approved pending receipt of (for example) the firm’s first peer review, evidence that CPE has been obtained, etc. Any conditions or restrictions upon the firm’s practice are included in the approval letter. An approved CPA firm also receives information by email from LLA regarding contact ID numbers that they will need to submit engagements and reports.

For questions about CPA firm approval, please contact LLA’s Engagement Manager LLA LaGAG.

QUESTIONS:

Q. I have recently set up a new CPA firm and I have not yet had a peer review. Will LLA approve my firm?
A. If a newly established CPA firm has not had its first peer review, the CPA firm will be asked to provide confirmation that it is enrolled in the peer review program of their state (in Louisiana, the LCPA) or the AICPA. It will also be required to provide LLA with a copy of its first peer review upon completion.

Q. My CPA firm is not located in the state of Louisiana. Is there anything special I need to do for LLA to approve my firm?
A. LLA will consider approval of CPA firms that are not domiciled in the state of Louisiana upon receipt of the above information. Although LLA approves CPA firms to perform governmental engagements in the state of Louisiana, questions about general licensing and other requirements for an out-of-state firm to be able to perform audits and other attest engagements in the state of Louisiana should be directed to the State Board of CPAs of Louisiana.

Q. I would like to perform audit and other attest engagements for LLA. My firm’s latest peer review received a grade of fail. Will LLA approve my firm?
A. Generally speaking, LLA does not approve a new CPA firm whose most recent peer review received a failed grade. The CPA firm is encouraged to apply to LLA for approval if the firm’s next peer review receives a grade of pass.

Q. My firm has been approved by LLA. How long will it take for my firm’s name to appear on the approved list on LLA’s website?
A. Generally speaking, a CPA firm’s name appears on LLA’s website the day after the firm is approved and entered into LLA’s database. If it does not, please contact LLA’s Engagement Manager LLA LaGAG.

Q. My firm has been approved by LLA. Will LLA assist me in getting audit engagements with local auditees?
A. No. It is the CPA firm’s responsibility to solicit audit engagements with local auditees.

Q. How would a firm find out about the state engagements that are available?
A. Information regarding current solicitations for proposal for state engagements and information on how to respond to these solicitations are available on LLA’s website.

Q. A local auditee that is statutorily required to submit sworn financial statements to LLA has approached my CPA firm about performing an audit. Must my firm be approved by LLA to perform the engagement?
A. LLA will accept an audit, review, or compilation report from a CPA firm that is not on LLA’s approved list for local auditees that are required to submit sworn financial statements. These reports must be submitted to ereports@lla.la.gov.


NB: This document is the current version as of 09/28/2020.

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