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6. Communication with audit committees A. Communicationof reportable conditions Auditing standards require reportable conditions to be communicated to the audit committee. The eom�nas�ieatiot� may take place afier the audit is concluded or during lhe aa�fit if timely communicationis important. The relative significance of the matters or the urgency of corrective follow-up action may influence the auditor's decision on when to communicate the conditions. The auditor need not communicate reportable conditions of which the audit committee is aware and has acknowledgedits understandingof the as�ociated risks. B. Ccr�z��nication aMout rr�rti and illegal acts � If ��e determine there is evidence fraud may e�st (even if the matter is inconsequential) a��Elit€ng standards require us to reportit to the appropriate level of management. If the F��ud or potential �fi'at�d involves senior management or causes the financial statements to be materially misstated, it will be reported directly to the audit committee. We are required to reach an understandingwith the audit committee a'�o�.tt the nature and ea-tent of coir�nunica#iat� eapected about immaterial fraud not involving senior management (�� :1: as misappropriationscommitted by lower level employees). In the absence of such a�� igre�ment, we should report all instances of fraud to both the appropriate level of managementand the auditcommittee. C. Communicationof other information Ca�!�ers matters which are required to be communicated to the audit committee will bc :�� , I��c��d in our managementreport and include the following: � Auditor responsibility The level of responsibility the auditor assumes for an audit performed in accordance with generally accepted auditing standards and the nature of the assurance an auditprovides. • Accounting policies The initial selection of and changes in significant policies or their application, methods used to account for significant unusual transactions, and the effect of significant accountingpolicies in controversial or emerging areas. • Estimates The process managementuses to formulate pastiaularty sensitive accounhng estimates and the basis for the auditor's conclusions about the reasonableness of those estimates. � Adjustments The significant adjustments arising from the audit including those that ha�e been reflected in the financial statements and those that were not. In addition, auditors are required to inform the audit committee about uncorrected misstatements that management has concluded are not material to the financial statements. • Other information