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<br />iC- Y L. <br /> <br /> <br />AUt; 2 f 20W <br /> <br />Grandview Square <br /> <br />5201 Eden Avenue <br />Suite 370 <br /> <br />Edina, MN 55436 <br /> <br />Dear Client: <br /> <br />Internal control is a consideration in every audit. In the last several years, there have been numerous highly <br />publicized instances of financial statement fraud. Even before we dealt with Enron related issues, the <br />Auditing Standards Board of the. American Institute of Certified Public Accountants (AICPA) was working <br />to improve the audit procedures relating to the consideration of fraud in a financial statement audit. The <br />purpose of this letter is to update you on some changes.that will have an impact for our audit of the 2003 <br />financial statements. <br /> <br />The Auditing Standards Board issued Statement on Auditing Standards (SAS) No. 99, Consideration of <br />Fraud in a Financial Statement Audit in September 2002 and became effective for periods beginning after <br />December 15,2002. This standard was issued to improve the chances that material misstatements due to <br />fraud would be detected. We have always had standards addressing the likelihood of fraud in our audit, but <br />some of the significant changes are listed below: <br /> <br />. Brainstorming sessions with audit team members to discuss the potential for material misstatement <br />due to fraud. . <br />. More inquiry designed to detect fraud. <br />. More analytical procedures designed to identify the risk of the material misstatement due to fraud. <br />. More information gathering procedures. <br /> <br />The results of the procedures could lead to more fieldwork during the audit. Ata minimum,.we will be <br />spending more time in the preliminary stages of the audit. If our preliminary work indicates a higher risk of <br />fraud exists, we will spend time in that area to develop procedures to address that risk. <br /> <br />The effects of this Standard will result in more time during the audit, which will result in a higher cost to <br />you. Weare not approaching this Standard as a revenue generating tool. We are looking at this standard as <br />an opportunity to rethink our audit practices and design effective new ways to make you better. Our <br />mission as a firm is to help you improve your organization. We look forward to answering any questions <br />and helping you prepare for year end. . . <br /> <br />Sincerely, <br /> <br />ABDO, EICK & MEYERS, LLP <br />Certified Public Accountants <br /> <br />952.835.9090 Fax 952.8353261 <br /> <br />www.aemcpas.com <br />