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<br /> <br />Cit of Cenrerville <br />October 12, 2007 <br />Page Three <br /> <br />Audit Proeedures - General <br /> <br />An audit includes examining. on a test basis, evidence supporting the amounts and disclosures in the financial statements; <br />therefore, our audit will involve judgment about the number of transactions to be exaniined and the areas to be tested. We will <br />plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of <br />material misstatement, whether from (1) errors, (2) fi:audplent financial reporting, (3) misappropriation ofassets, or (4) violations <br />of laws or governmental regulations that ate attnDutable to the entity or to acts by management or employees acting on behalf of . <br />the entity. <br /> <br />Because an audit is designed to provide reasonable, but not absolute, assurance and because we will not -perform a detailed <br />examination of all transactions, there is a risk that material misstatements may exist and not be detected by us. In addition, an <br />audit is not designed to detect immaterial misstatements, or violations of laws or governmental regulations that do not have a - <br />direct and material effect on the financial statements. However, we will inform you of any material errors and any fraudulent <br />financial reporting or misappropriation of assets that come to our attention. We will also inform you of any violations of laws or <br />governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the <br />period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. <br /> <br />Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include <br />tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by <br />correspondence with selected individuals, creditors, and financial institutions. We will request written representations from your <br />attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will <br />also require certain written representations from you about the financial statements and related matters. <br /> <br />Audit Proeedures - Internal Control <br /> <br />Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess <br />the risks of material misstatement of the financial statements and to design the nature, timing, and extent offurther audit <br />procedures. An audit is not designed to provide assurance on internal control or to identify deficiencies in internal control. <br />However, during the audit, we will communicate to management and those charged with governance internal control related <br />matters that are required to be communicated under professional standards. <br /> <br />Audit Proeedures - Compliance <br /> <br />As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will <br />perform tests of the City's compliance with applicable laws and regulations and the provisions of contracts and agreements. <br />However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an <br />opinion. <br /> <br />200"-ALG-CL-l.l: Audit Engagement Letter-Standard <br /> <br />952.835;9O!Iile ._M.'~1 <br />~.. <br /> <br />/~ <br />