Firm Profile Process and Due Date

If your independent public accounting firm wishes to join the list of firms eligible to conduct government audits in New Mexico, please contact Bernadet Martinez by email or 505-476-3800 to obtain login information.

Additional Required Documents:

Notice: All Firms Interested in Conducting Financial Compliance and

Agreed-Upon Procedures (AUP) for FY2020.

Firm profiles: For an IPA to be included on the state auditor’s list of approved firms, an IPA shall submit a firm profile online annually on the fifth business day in January, in accordance with the guidelines set forth herein. The OSA shall review each firm profile for compliance with the requirements set forth in this rule. IPAs shall notify the state auditor of changes to the firm profile as information becomes available. The state auditor shall approve contracts only with IPAs who have submitted a complete and correct firm profile that has been approved by the OSA, and who have complied with all the requirements of this rule, including but not limited to:

(1) Subsection A of 2.2.2.14 NMAC, continuing professional education requirements for all staff that the firm will use on any New Mexico governmental engagements;

(2) listed professional service contracts the firm entered into;

(3) for IPAs who have audited agencies under this rule in the past, they shall have previously complied with: 2.2.2.9 NMAC, report due dates, including notifying the state auditor regarding late audit reports and 2.2.2.13 NMAC, review of audit reports and audit documentation.


Audit Rule Citations:

https://www.saonm.org/wp-content/uploads/2020/03/2.2.2-03102020.pdf 

2.2.2.8 THE PROCUREMENT AND AUDIT PROCESS:

A. Firm profiles: For an IPA to be included on the state auditor’s list of approved firms, an IPA
shall submit a firm profile online annually on the fifth business day in January, in accordance with the guidelines set
forth herein. The OSA shall review each firm profile for compliance with the requirements set forth in this rule.
IPAs shall notify the state auditor of changes to the firm profile as information becomes available. The state auditor
shall approve contracts only with IPAs who have submitted a complete and correct firm profile that has been
approved by the OSA, and who have complied with all the requirements of this rule, including but not limited to:

(1) Subsection A of 2.2.2.14 NMAC, continuing professional education requirements for all
staff that the firm will use on any New Mexico governmental engagements;

(2) listed professional service contracts the firm entered into;

(3) for IPAs who have audited agencies under this rule in the past, they shall have previously
complied with: 2.2.2.9 NMAC, report due dates, including notifying the state auditor regarding late audit reports
and 2.2.2.13 NMAC, review of audit reports and audit documentation.

B. List of approved firms: The state auditor shall maintain a list of independent public accounting
(IPA) firms that are approved and eligible to compete for audit contracts and AUP engagements with agencies. The
state auditor’s list of approved firms shall be reviewed and updated on an annual basis. An IPA on the list of
approved firms is approved to perform government audits until the list of approved firms is published for the
following year; provided that the OSA may restrict firms at any time for failure to submit firm profile updates
timely. An IPA that is included on the state auditor’s list of approved firms for the first time shall 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).
The state auditor shall approve contracts only with IPA firms that have submitted a complete and correct firm profile
complying with all the requirements set forth in this rule and that has been approved by the OSA. The OSA shall
inform all IPAs whose firm profiles were submitted by the due date whether they are on the list of approved firms
and shall publish the list of approved firms concurrent with notification to government agencies to begin the
procurement process to obtain an IPA to conduct the agency’s annual financial audit.

C. Disqualified firms: An IPA firm shall not be included on the list of approved firms if any of the
following applies to that IPA:

(1) the firm received a peer review rating of “failed”;

(2) the firm does not have a current New Mexico firm permit to practice;

(3) the firm profile does not include at least one certified public accountant with a current
CPA certificate who has met the GAGAS CPE requirements described at Subsection A of 2.2.2.14 NMAC, to
perform GAGAS audits;

(4) the IPA has been restricted in the past and has not demonstrated improvement (this
includes submitting excessively deficient audit reports or having excessively deficient workpapers);

(5) the IPA made false statements in their firm profile or any other official communication
with the OSA that were misleading enough to merit disqualification; or

(6) any other reason determined by the state auditor to serve the interest of the state of New
Mexico.

D. Restriction:

(1) IPAs may be placed on restriction based on the OSA’s review of the firm profile and
deficiency considerations as described below. Restriction may take the form of limiting either the type of
engagements or the number of audit contracts, or both, that the IPA may hold. The OSA may impose a corrective
action plan associated with the restriction. The restriction remains in place until the OSA notifies the IPA that the
restriction has been modified or removed. The deficiency considerations include, but are not necessarily limited to:

(a) failure to submit reports in accordance with report due dates provided in
Subsection A of 2.2.2.9 NMAC, or the terms of their individual agency contract(s);

(b) failure to submit late report notification letters in accordance with Subsection A
of 2.2.2.9 NMAC;

(c) failure to comply with this rule;

(d) poor quality reports as determined by the OSA;

(e) poor quality working papers as determined by the OSA;

(f) a peer review rating of “pass with deficiencies” with the deficiencies being
related to governmental audits;

(g) failure to contract through the OSA for New Mexico governmental audits or
AUP engagements;

(h) failure to inform agency in prior years that the IPA is restricted;

(i) failure to comply with the confidentiality requirements of this rule;

(j) failure to invite the state auditor or his designee to engagement entrance
conferences, progress meetings or exit conferences after receipt of related notification from the OSA;

(k) failure to comply with OSA referrals or requests in a timely manner;

(l) suspension or debarment by the U.S. general services administration;

(m) false statements in the IPA’s firm profile or any other official communication
with the OSA;

(n) failure to cooperate timely with requests from successor IPAs, such as reviewing
workpapers; or

(o) any other reason determined by the state auditor to serve the interest of the state
of New Mexico.

(2) The OSA shall notify any IPA that it proposes to place under restriction. If the proposed
restriction includes a limitation on the number of engagements that an IPA is eligible to hold, the IPA shall not
submit proposals or bids to new agencies if the number of multi-year proposals the IPA possesses at the time of
restriction is equal to or exceeds the limitation on the number of engagements for which the IPA is restricted.

(3) An IPA under restriction is responsible for informing the agency whether the restricted
IPA is eligible to engage in a proposed contract.

(4) If an agency or local public body submits an unsigned contract to the OSA for an IPA
that was ineligible to perform that contract due to its restriction, the OSA shall reject the unsigned contract.