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City of Lino Lakes <br />Management Report, Page 37 <br />auditing procedures necessary for the expression of an opinion on the City's financial <br />statements. Our study was more limited than would be necessary to express an opinion on <br />the system of internal accounting control taken as a whole or on any of the categories <br />of controls identified. <br />The City of Lino Lakes is responsible for establishing and maintaining a system of <br />internal accounting control. The objective of internal accounting control is to provide <br />reasonable, but not absolute, assurance as to the safeguarding of assets against loss <br />from unauthorized use or disposition, and the reliability of financial records for pre- <br />paring financial statements and maintaining accountability for assets. The concept of <br />reasonable assurance recognizes that the cost of a system of internal accounting control <br />should not exceed the benefits derived and also recognizes that the evaluation of these <br />factors necessarily requires estimates and judgments by management. <br />There are inherent limitations that should be recognized in considering the poten- <br />tial effectiveness of any system of internal accounting control. In the performance of <br />most control procedures, errors can result from misunderstanding of instructions, mis- <br />takes of judgment, carelessness, or other personal factors. Control procedures whose <br />effectiveness depends upon segregation of duties can be circumvented by collusion. <br />Similarly, control procedures can be circumvented intentionally by management either <br />with respect to the execution and recording of transactions or with respect to the esti- <br />mates and judgments required in the preparation of financial statements. <br />Also, projection of any evaluation of the system to future periods is subject to the <br />risk that the procedures may become inadequate because of changes in conditions and that <br />the degree of compliance with the procedures may deteriorate. <br />Our study and evaluation made for the limited purpose described in the first <br />paragraph would not necessarily disclose all material weaknesses in the system. <br />Accordingly, we do not express an opinion on the system of internal accounting control <br />