2004-12-20 CC Packet - Laserfiche WebLink

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December 1,2004 Page Two You are iespoDsible for the design and iuiplementation ofprogratris and con1rols to prevent and detect ftaud, and for infotming us about all known or.suspected:fiaud affecting the government involving (a) management, (b) employees who have significant roles in internal control, and (c) others where the :fiaud could have a material effect on 1he financlal statements. You are also '. responsible for informing us of yom knowledge of any allegations of:fiaud or suspected fraud affecting 1he ~emment receive4 in crnmmm;C8tions from. employees, former employees, regulatms or others. In addition, you are rCsponsible for identifying and ensming1iJat 1he entity complies wi1h applicable laws and regulations. . Audit Procedures.- General An audit includes AYmmnmg, on a test basis, evidence supporting 1he amounts and disclosures in the financlal statements; therefore, om audit will involve jl1dgJ"ent about the number of transactions to be AYAmined and the areas to be tested. We will plan and perform the audit to ob1ain reasonable mfher ~ absolute assurance about whether the financial stafeJ1wnts are :free of ~ missfatement, whether ftom ~ ftaudulent finmtcllll ~ misappropriation of assets, en: violations ofJaws or goveuu;lental regulations that are attribu1able to the entity or to acts by:mana.sement or employees acting on behalf of the entity. Because an audit is designed to provide reasonable, but not absolute, assurance and bec8use we will not perform a detailed eYAmmsrtiOn, of all tmnsactions, 1here is a risk 1iJat ~miss1atements may exist and not be detected by us. In addition, an audit is not designed to detect nnmllferial ~ or violations oflaws or govemmenta1 regulations 1iJat 40 not have a . direct and material effect on the financial statements. However, we will inform you of anY material errors 1iJat come to om attention, and we will inform you of any fraudulent financlal reporting or misappropriation of assets 1iJat come to om attention. We will also inform you of any violations of laws or govemmet$l regulations that come to om attention, unless clearly inconsequentiaLOur responsibility as an auditor is limited to die period covered by om audit and does not extend to matters 1hat might arise during any later periods for which we are not engaged as auditors. Our procedures will include tests of doWa.w:.ntmy evidence supporting the fl'ansactions recorded in the accounts, and may include tests of the physical existence otinventories, and direct lYmfinmltion of receivables and certain 01her assets and liabilities by correspondence wi1h selected individuals, creditors, and financial institutions. We will request written representations from. your attorneys as part of the engagement, and they may bill you for responding to 1his inquiry. At the conclusion of om audit, we will also require certain written representations from you about the financial statements and related matters. ldentify.ing and ens'or.ing that the City CODiplies wi1h laws, regulations, contracts, and agreements is the responsibility of management. As part of obtaining reasonable assmance about whether the financial statements are :free of material missfatement, we will perform. tests of1he City compliance with applicable laws and regulations and 1he proVisions of contmcts and ~. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion. Audit Procedures - Internal Conirol In planning and perfor:ining our audits, we will consider the internal control sufficient to plan the audit in order to determine 1he nature, timing and extent of om auditing procedures for 1he pmpose of expressing om opinion on the City's :6nancia1 statements. An audit is not designed to provide assmance on intema1 con1rol orto identify reportable conditions. However, we will inform. the governing body or audit committee of any matters involving intema1con1rol and its operation that we consider to be reportable conditions under standards established by the American Institute ofCeitifi.ed Public ACcolDltants. Reportable conditions involve matters coming to om attention relating to Rigrltficsmt deficiencies in the design: or operation of the internal con1rolthat, in OUr judgment, could adversely affect the City's ability to record, process, S.....H...ri7.,e and report financial data consistent wi1h the ~ons of management in the ~cial statements. 9S2.83S.9090 " &x 9S2.835.3261 www.aenwpas.eOm