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6. Commt►nicatia�� with audit committees <br />A. Carr��t��u�icatian of reportableconditions <br />Auditing standards require reportable conditions to be communicated to the audit <br />committee. The communicationmay take place after the audit is concluded or during the <br />at�c(�G if timely pt��nrr���nica�Q� is important. The relative significance of the matters or the <br />urgency of corrective follow-up action may influence the auditor's decision on when to <br />communicate the conditions. The auditor need not communicate reportable conditions of <br />which the audit committee is aware and has ackr►owlet�ged its understanding of the <br />as�c�ciated risks. <br />B. Carrtmunica�io�n about �'rn �s�� and illegal acts <br />If we determine there is evidence fraud may e�st (even if the matter is inconsequential) <br />aird�ting standards require us to report it to xhe appropria�: level of management. If the <br />Fx��iicl or potential fraud involves senior managementor causes the financial statements to <br />bc materially misstated, it will be reported direotly to the audit committee. We are <br />requireci to reach an understandingwiththe audit committee about the nature and ea-tent <br />of communicationeapected about immaterial fraud not involving senior management <br />(«�ch as misappropriationscommitted by lower level employees). In the absence of such <br />aa�i a��reer�ent, wc should reportall instances of fraud to both the appropriate lev�l of <br />mc�nagernent at�d the audit committee. <br />C. �prt�m��t7icat�vn of other information <br />Of?��rs matters which are required to be communicatedto the audit committee will be <br />ir�c I�-�c�ed in our managementreportand include t�e following: <br />� Auditor responsibility <br />The level of responsibility the auditor assumes for an audit performed in <br />accordance with generally accepted auditing standards and the nature of the <br />assurance an audit provides. <br />f Accounting policies <br />The initial selection of and changes in significantpolicies or their application, <br />methods used to account for significant unusual transactions, and the effect of <br />significant accountingpolicies in controversial or emerging areas. <br />• ��,stznaates <br />The process managementuses to fu�3�,l�te particularly sensitive accounhng <br />estimates and the basis for the auditor s conclusions about the reasonableness of <br />those estimates. <br />s Adjustments <br />The significant adjustments arising from the audit including those that ha�e been <br />reflected in the financial statements and those that were not. In addition, <br />auditors are required to inform the audit committee about uncorrected <br />misstatementsthat management has concludedare not material to the financial <br />statements. <br />� Other information <br />