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1 <br /> CITY OF ROSEVILLE <br /> REQUIRED COMMUNICATION <br /> December 31, 2014 <br /> QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES <br /> Accounting estimates are an integral part of the financial statements prepared by management and are <br /> based on management's knowledge and experience about past and current events and assumptions about <br /> ' future events. Certain accounting estimates are particularly sensitive because of their significance to the <br /> financial statements and because of the possibility that future events affecting them may differ <br /> significantly from those expected. The most sensitive estimates affecting the financial statements were: <br /> Depreciation—The City is currently depreciating its capital assets over their estimated useful lives, <br /> as determined by management, using the straight-line method. <br /> Expense Allocation—Certain expenses are allocated to functions based on an estimate of the benefit <br /> to that particular function. Examples are salaries, benefits and supplies. <br /> ' Net Other Post Employment Benefits (OPEB) Obligation—This liability is based on an actuarial <br /> study using estimates of future obligations of the City for post-employment benefits. <br /> The financial statement disclosures are neutral, consistent and clear. <br /> DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT <br /> We encountered no difficulties in dealing with management in performing and completing our audit. <br /> CORRECTED AND UNCORRECTED MISSTATEMENTS <br /> Professional standards require us to accumulate all misstatements identified during the audit, other than <br /> those that are clearly trivial, and communicate them to the appropriate level of management. We <br /> identified an uncorrected misstatement related to the change in market value in the financial statements. <br /> Management has determined its effect is immaterial, both individually and in the aggregate, to the <br /> financial statements taken as a whole. <br /> ' The following material misstatements detected as a result of audit procedures were corrected by <br /> management. <br /> • Adjusting the value of investments to market value <br /> • Deferring revenue received over 60 days from year-end in governmental funds <br /> • To record amounts due from other governments <br /> DISAGREEMENTS WITH MANAGEMENT <br /> ' For purposes of this letter, a disagreement with management is a financial accounting,reporting or <br /> auditing matter, whether or not resolved to our satisfaction that could be significant to the financial <br /> statements or the auditor's report. We are pleased to report that no such disagreements arose during the <br /> course of our audit. <br /> MANAGEMENT REPRESENTATIONS <br /> We requested certain representations from management that are included in the management <br /> representation letter. <br /> 4 <br />