CCP 11-27-2006 - Laserfiche WebLink

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City of Ardenllills Page 3 . Octoher 2.1, 2006 . W c llIay prepare a general kdger trial haklllce for use during the audit. Our preparation of the trial balance \vill he limited to flmnatting infl)rmation in the City's generdllcdger into a working trial balance. As part of the audit, we llIay prepare a draft of your financial statements and related notes. In accordance with GOI'(TJ/f1ICnt Auditing .\'tandards, you will he required to review and approve those financial statements prior to their issuance and have a responsibility to be in a position in fact and appearance to make all informed judgment on those financial statements. Further, you are required to designate a qualified management-level individual to be responsihle and accountable fix overseeing our services. Audit Procedures - f;eneral An audit includes examining, on a lest basis, evidence supporting the amounts and disclosures in the financial statements; therdl'lre, our audit will involve judgment ahout the number of transactions to he l:xalllincd and the areas to be tested. We will plan and perform the audit to obtain reasonable, rather than absolute. assurance abollt whether the financial statements are free of material misstatement, whether from errors, fraudulent financial repol1ing, Inisappropriat ion o I' assets, or violations of laws or govcmll1ental regulations that are allributabk to the City or to acts by management or employees acting on behalf of the ('ity. Because the determination of ahuse is subjective, Govcrnment Auditing Standards docs not expect auditors to provide reasonabk assurance of detecting abuse. Because an audit is designed to provide reasonable, but not absolute assurance and because we will not perform a detailed examinat ion of all transactions, there is a risk that material misstaterl1l:nts may exist and nol he detected hy us. In addition, an audit is not dcsi!:,'lled to detect immaterial misstatements or violatillns of laws or governmental regulations that do not have a direct and material e1fcct on the financial slakmcnts. Ilowcver, we will inflmn you of any material errors and any fraudulent financial . reporting or misappropriation of assets that come to our attention. We will also inflmn you of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limikd to the pl:riod covcrl:d by our audit and docs not extend to later periods ll1r which we arl: not engaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions rel:()f(led in the accounts, and lIlay include tests of the physical existence of inventories, and direct confirmation of receivahles allll certain other asscts and liabilities by correspondence with selected individuals, creditors, and linancial institutions. \V e will request written representations from your attorneys as part of the engagement, and they may hill you Illr responding to this inquiry. At the conclusion of our audit, we will also require cel1ain written n:prescnt;Jtions frum you about the tinanci;JI statements and related matters. Audit ProcedUl-cs - IlItcmal Controls In planning and pcrtl)rlllillg our audit, we will consider the internal control sufficient to plan the audit in (.rder to determine the nature, timing, and extent of our auditillg procedures for the purpose of exprl:ssing our opinion on the City's financial statements. \Ve will obtain an understanding of the design ofthl: relevant controls and whethl:r they have been placed in operation, ,lIld we will assess control risk. Tests of controls may be performed to test the effectiveness of certain eontmls that we consider relevant to preventing and detecting errors and fraud that arc material to the financial slatcments ami to preventing and detecting misstatements resulting from illegal acts and oth('J" noncompliance matters that have a direct and material effect on the financial statements. Tests of controls arc required only if control risk is assessed below the maximum level. Our h:sts. if performed, . will he less in scope than would be nl:eessary to render an opinion on internal control and, accordingly, no opinion will be l:xpressed in our rep0l1 011 internal control issued pursuant to Govemmel/t Auditing ,.....{alltlards.