CCP 05-24-2004 - Laserfiche WebLink

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City of Arden Hills April I, 2004 Page Two . As part of obtaining reasonable assurance about whether the general purpose financial statements aTe free of material misstatement, we perfonned 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 noted no instances of non- compliance \....ith Minnesota slatules. Significant Accounting Policies Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagement leHer, \>"C will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the City are described in Note 1 to the general purpose financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2003. \Ve noted no transactions entered into by the City during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative guidance or consensus, Accounting Estimates Accounting estimates arc an integral part of the combined financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the general purpose financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The mosl significant estimate affecting . the financial statements was depreciation on fixed assets. Management '5 estimate of deprc<.:jation is based on estimated uscfullives of the assets. We evaluated the key factors and assumptions used to develop this estimate in determining that it is reasonable in relation to the financial statements taken as a whole. Audit Adjustments For purposes oftbis letter, professional standards define an audit adjustment as a proposed correction of the combined financial statements that, in our judgment, may nol have been detected except through our auditing procedures. An audit adjustment may or may not indicate matters that could have a significant elIect on the City's financial reporting process (that is, cause future financial statements 10 be materially misstated). In our judgment, none of the adjustments we proposed, whether recorded or unrecorded by the City, cithcr individually or in the aggregate, indicate mattcrs that could have a significant effect on the City's financial reporting process. We did propose 24 journal entries that are considered year end accounting entries that a City should make in order to have accurate records before an audit begins.. We encourage the City to reduce the accounting entries necessary to adjust year end balances. Wc noted no uncorrected misstatements. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting or auditing matter that could be significant to the general purpose financial statemenls or the auditor's report. \Ve are pleased to report that no such disagreements arose during the course ofuur audit. . %2.8:~;;.90I)O . Full. 9,')1.8.1:,d161 I\'ww.<olem<:>pds.("<.>Jll