2003-12-23 CC Packet - Laserfiche WebLink

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....- Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 Dear Client: Internal control is a consideration in every audit. In the last several years, there have been numerous highly publicized instances of financial statement fraud. Even before we dealt with Enron related issues, th~ . _Auditing Standards Board of the American Institute ofCerti.fied Public Accountants (AICP A} was working to improve the audit procedures relating to the consideration of fraud in a financial statemen.t audit. The purpose of this letter is to update you on some changes that will have an impact for our audit of the 2003 financial statements. The Auditing Standards Board issued Statement on Auditing Standards (SAS) No. 99, Consideration of Fraud in a Financial Statement Audit in Sq>tember 2002 and became effective for periods beginning after December 15, 2002. This standard was issued to improve t4e chances that material misstatements due to fraud would be detected. We have always had standards addressing the likelihood of fraud in our audit, but some of the significant changes are listed below: · Brainstorming sessions with audit team members to discuss the potential for material misstatement due to fraud. · More inquiry designed to detect fraud. · More analytical procedures designed to identify the risk of the material misstatement due to fraud. · More information gathering procedures. The results of the procedures could lead to more fieldwork during the audit. At a minimum, we will be spending more time in the preliminary stages of the audit If our preliminary work indicates a higher risk of fraud exists, we will spend time in that area to develop procedures to address thatrisk. The effects of this Standard will result in more time during the audit, which will result in a higher cost to you. We are not approaching this Standard as a revenue generating tool. We are looking at this standard as an opportunity to rethink our audit practices and design effective new ways to make you better. Our mission as a firm is to help you improve your organization. We look forward to answering any questions and helping you prepare for year end. ~1)9,EICK& MEY$S;~tp . Qeriifiid Public Accounftmts Sincerely, 952.835.9090 Fax 952.835.3261 . - , , -.;l~~ ).;:.~,_~~:~~~--..: "-f"-'-' ."