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L.n t <br /> �ABDO <br /> ABDO <br /> �J EK & <br /> M{ <br /> Centfwd Addi'c Acca wavj & a mhmt.s <br /> 7241 Ohms I,w <br /> Suite 200 <br /> hiinnevpulis'. MN 55439 <br /> April 16, 1998 <br /> Members of the City Council <br /> City of Centerville, Minnesota <br /> Professional standards require that we provide you with the following information related to our audit <br /> Our Responsibility Under Generally Accented Auditing Standards and Government Auditing Standards <br /> As stated in our engagement letter, our responsibility, as described by professional standards, is to plan and perform <br /> our audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material <br /> misstatement and are fairly presented in accordance with generally accepted accounting principles. Our audit is <br /> designed to provide reasonable assurance of detecting misstatements that, in our professional judgment, would have <br /> a material effect on the financial statements taken as a whole. Consequently, our audit will not necessarily detect <br /> misstatement less than this materiality level that might exist due to error, fraudulent financial reporting or <br /> misappropriation of assets. <br /> As part of our audit, we considered the internal control of the City. Such considerations were solely for the purpose <br /> of determining our audit procedures and not to provide any assurance concerning such internal control. As part of <br /> obtaining reasonable assurance about whether the financial statements are free of material misstatement, we <br /> performed tests of compliance with certain provisions of laws, regulations, contracts and grants. However, the <br /> objective of our tests was not to provide an opinion on compliance with such provisions. <br /> Accounting Estimates <br /> Accounting estimates are an integral part of the combined fmancial statements prepared by management and are <br /> based on management's knowledge and experience about past and current events and assumptions about future <br /> events. Certain accounting estimates are particularly sensitive because of their significance to the general purpose <br /> financial statements and because of the possibility that future events affecting them may differ significantly from <br /> those expected. The most sensitive estimates affecting the financial statements was depreciation on fixed assets. <br /> Management's estimate of depreciation is based on estimated useful lives of the assets. We evaluated the key <br /> factors and assumptions used to develop this estimate in determining that it is reasonable in relation to the financial <br /> statements taken as a whole. <br /> Significant Audit Adjustments <br /> For purposes of this letter, professional standards define a significant audit adjustment as a proposed correction of <br /> the general purpose financial statements that, in our judgment, may not have been detected except through our <br /> auditing procedures. We proposed no material audit adjustments. <br /> 612.835AM • Faa 612,33.53261 <br />