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AUDIT SERVICES APPROACH (Continued) Engagement Segmentation (Continued) Fieldwork The fieldwork phase of the engagement consists of implementing procedures custom tailored during the preliminary fieldwork and planning phase. These procedures typically consist of the following: 1) Substantive tests of transaction classes and account balances, 2) Analytical procedures consisting of trend and ratio analysis are utilized when deemed appropriate during the audit planning phase, and 3) Specific procedures designed to determine the City's compliance with laws and regulations. Report preparation and review After an evaluation of audit test results, we cross-reference data in our working papers to our client's financial statements, required supplementary information, and footnotes. We review the entire financial reporting package for proper presentation and disclosure and adherence with our Firm's quality control standards. At this phase of the audit, we also prepare required communications with the members of governance as determined by you, and management advice recommendations specifically tailored to provide recommendations on improving the operations, systems, and procedures of your City. Exit conference and draft discussion Before formal presentation of the audited financial statements to the City Council, we take time to meet with the City's upper management to discuss the results of our audit procedures, communicate significant deficiencies and material weaknesses (if any), discuss the content of management advice letters, and review the overall financial statement presentation. Procedures related to audit adjustments During our exit conference, we will provide you with our proposed audit adjustments and related explanations so you understand them thoroughly and are in agreement with such adjustments. We will also require that you formally approve such adjustments prior to release of the audited financial statements. Presentation at the City Council meeting At the conclusion of the audit, a formal presentation is given to the City Council by the engagement partner and/or senior manager. At this meeting, we discuss the financial results of the City, communicate significant deficiencies and material weaknesses (if any), present management advice letters, and respond to inquiries made by the Council. QUALITY CONTROL, SUPERVISION, AND REVIEW PROCEDURES Quality control is very important to our firm. At Schlenner Wenner & Co., we are a firm believer that good quality control starts by promoting an internal culture based on the recognition that quality is essential in performing engagements. That's why we have designated Audit Quality Partners to oversee the firm's audit, accounting, and quality control processes. In addition, our firm maintains a high level of quality by hiring and maintaining competent staff, ensuring all engagements are properly supervised, reviewed, documented, and reported, and by subjecting ourselves to an independent peer review every three years. All of our audit engagements are assigned at least one partner and one supervisory level professional who oversee every aspect of the engagement. These professionals supervise and review all segments of the audit to ensure that every audit conforms to our strict quality control and professional standards. What this means for you is that you can expect a quality, efficient, and accurate audit with minimal disruption to you and your accounting staff. 13