CCP 05-17-2004 - Laserfiche WebLink

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. . . City of Arden Hills April 1, 2004 Page Two As part of obtaining reasonable assurance about whether the general purpose financial statements arc free of material misstatement, we petformed tests of compliance with certain provisions of laws. regulations.. contracts and grants. However, the objective of our tests was not to provide an opinion on compliance with such provisions. .We. n.oted no instances of non~ compliance with Minnesota statutes. - Significant Accounting Policies Management has the responsibility for selection and use of appropriate acco~n~ing policies. hl-~co~dance with the terms of our engagement letter, we will advise management about the appropriateness,.ofaccounting policies 3n9n~ir application. The significant accounting policies used by the City are described in Note_,l~oilie general purpose financialsptements. No new accounting policies were adopted and the application of existing polieies:was not changed during 2003."V~{e_:noted no transactions entered into by the City during the year that were bothsignificant and unusual, and of which; Utl.der_professional standards, we arc required to inform you, or transactions for which there is a lack of.a'llthoritative guidance dr:ehnsensus. Accounting Estimates Accounting estimates are an integral part of the combined financial statements prepared by management and are based on management's knowledge and experience about past-a:tui cUrrent events and assutnptions about future events. Certain accounting estimates are particularly sensitive because of their significance toihe:g(;neral pUrPose,~nancial statements and because of the possibility that future events affecting them may differ sigllificantly from those expected,; The most significant estimate affecting the financial statements was depreciation on fixed assets. Management's estimate of deprp~iation is:,bas~don estimatedusefut: lives of the ass.ets. We evaluated the key factors and assumptions used to develop.thi~.estimate iIi'determining that it is reasonable in relation to the financial statements taken as a whole. Audit Adjustments For purposes,~f~t~:-l~~t~t"pr()fessioI1'al~tahdatds define an audit adjustment as a proposed correction of the combined financial statementsJ9~t~~n,-<mr judgIIlel1t,:~ay not.hI1.~e been detected except through our auditing procedures. An audit adjustment may or may. Il,Q,tjndicate matters that:"C()111~ havea.-~i~~ificant effect on the City's financial reporting process (that is, cause future finanG~~I:,~ta:tements to be materiaili,mJsstated)~ltl,9_ur judgment, none of the adjustments we proposed, whether recorded or unrecord~~~?~the City, either indiviQ\J~llY or in th~,'ilggregate, indicate matters that could have a significant effect on the City's financial re~i.l1g process. We did pf()ppse 24 journal entries that are considered year end accounting entries that a City should make in order-.~Qih:ave accurate rccords.l:iefore an audit begins. We encourage the City to reduce the accounting entries necessary to adjust year eii&halances. We noted rio-ancorrected misstatements. Disagreements with 'Management For purposes of this letter, pr()(es_sional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning annancial accounting, reporting or auditing matter that could be significant to the general purpose financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. %2.83.';,9090 . Filll. 952.8:=\S.3261 www.aemcplls.com