Louisiana Legislative Auditor
Daryl G. Purpera, CPA, CFE

November 10, 2015

Legislative Auditor Talks Enhanced Audit Standards with Louisiana CPAs; Forms Local Government Audit CPA Working Group

Legislative Auditor Daryl Purpera is preparing a set of additional questions for auditors to ask local governmental agencies when they go in to track how public dollars are being spent in those agencies each year.

“Right now, we are auditing by the letter of the law, but sometimes we are missing the spirit of what taxpayers expect in accountable, transparent and responsive government,” Purpera said.

Speaking to a gathering of nearly 300 Certified Public Accountants (CPAs) at the annual 2015 Government Accounting and Auditing Conference in Lafayette this week, Purpera talked about how taxpayers want to know things that are not always considered “material” under current audit standards. These include how public credit cards are being used, what kinds of travel expenses are being reimbursed, and whether purchases are being properly bid out, among other things.

Purpera is looking to make the additions to what is known as the Louisiana Governmental Audit Guide, a guidebook produced by the Legislative Auditor and the Society of Louisiana Certified Public Accountants that sets forth the standards for how local governmental entities are audited in Louisiana.

Each year, the Legislative Auditor’s office releases more than 150 audit reports conducted by its own staff auditors. However, it also oversees the work of more than 300 independent contracted CPA audit firms that each fiscal year conduct more than 4,000 audits of state and local governmental agencies as well as quasi-public entities and non-profits receiving public money.

State law gives the Legislative Auditor the authority to prescribe the terms and conditions of these contracted audits, and CPAs must adhere to certain government audit standards. While current governmental audit standards catch many errors or instances of fraud, the state auditor said some key accountability measures that could better protect taxpayers are being missed.

“Audit standards say that you are supposed to plan and perform an audit so that it reasonably detects fraud that would result in a misstatement of the financial statements that is ‘material,’” Purpera said. “So, for example, if we have a city that has $3.5 million in revenue each year, and a public official steals $25,000, dollar-wise that may not be considered ‘material’ to the financial statements of that city. But, to a taxpayer, it’s important to know about that kind of theft.”

The Legislative Auditor is reaching out to CPAs around the state to form a local governmental audit CPA working group to improve over the next year the agreed-upon procedures and standards by which CPAs conduct audits of local governmental bodies.

“By taking this enhanced level of scrutiny to government finances,” Purpera said, “our Louisiana CPAs will be instrumental in building more public trust in local government across our state.”

For more information contact:

Legislative Auditor
225.339.3800



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Office of the Louisiana Legislative Auditor | www.LLA.La.gov