09-23-1998 Council Agenda - Laserfiche WebLink

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City of Little Canada Audit Contract August 28, 1998 Page 3 Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with 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 this inquiry. At the conclusion of our audit, we will also request certain written representations from you about the financial statements and related matters. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Also, we will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Because of the concept of reasonable assurance and because we will not perform a detailed examination of all transactions, there is a risk that material errors, fraud, or other illegal acts may exist and not be detected by us. However, we will inform you of any material errors and any fraud that come to our attention. We will also inform you of any other illegal acts that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that might arise during any later periods for which we are not engaged as auditors. We understand that you will provide us with the basic information required for our audit and that you are responsible for the accuracy and completeness of that information. We will advise you about appropriate accounting principles and their application, but the responsibility for the financial statements remains with you. This responsibility includes the establishment and maintenance of adequate records and related intemal control structure policies and procedures, the selection and application of accounting principles, and the safeguarding of assets. Management is also responsible for identifying and ensuring that the entity complies with applicable laws and regulations. We understand that your employees will type all cash or other confirmations we request and will locate any invoices selected by us for testing. We understand the workpapers for this engagement are the property of HLB Tautges Redpath, Ltd. and constitute confidential information. However, we may be requested to make certain workpapers available to certain regulators pursuant to authority given to it by law or regulation. If requested, access to such workpapers will be provided under the supervision of HLB Tautges Redpath, Ltd. personnel. Furthermore, upon request, we may provide photocopies of selected workpapers to regulators. The regulator may intend, or decide, to distribute the photocopies of information contained therein to others, including other governmental agencies. Page 47