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Audit Procedures—General <br /> An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in <br /> the financial statements; therefore, our audit will involve judgment about the number of <br /> transactions to be examined and the areas to be tested. We will plan and perform the audit to <br /> obtain reasonable rather than absolute assurance about whether the financial statements are free <br /> of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) <br /> misappropriation of assets, or (4) violations of laws or governmental regulations that are <br /> attributable to the entity or to acts by management or employees acting on behalf of the entity. <br /> Because the determination of abuse is subjective, Government Auditing Standards do not expect <br /> auditors to provide reasonable assurance of detecting abuse. <br /> Because an audit is designed to provide reasonable, but not absolute, assurance and because we <br /> will not perform a detailed examination of all transactions, there is a risk that material <br /> misstatements or noncompliance may exist and not be detected by us. In addition, an audit is not <br /> designed to detect immaterial misstatements or violations of laws or governmental regulations <br /> that do not have a direct and material effect on the financial statements or major programs. <br /> However, we will inform you of any material errors and any fraudulent financial reporting or <br /> misappropriation of assets that come to our attention.We will also inform you of any violations <br /> of laws or governmental regulations that come to our attention, unless clearly inconsequential. <br /> We will include such matters in the reports required for a Single Audit. Our responsibility as <br /> auditors is limited to the period covered by our audit and does not extend to later periods for <br /> which we are not engaged as auditors. <br /> Our procedures will include tests of documentary evidence supporting the transactions recorded <br /> in the accounts, and may include tests of the physical existence of inventories, and direct <br /> confirmation of receivables and certain other assets and liabilities by correspondence with <br /> selected individuals, funding sources, creditors, and financial institutions. We will request <br /> written representations from your attorneys as part of the engagement, and they may bill you for <br /> responding to this inquiry. At the conclusion of our audit, we will also require certain written <br /> representations from you about the financial statements and related matters. <br /> Audit Procedures—Internal Controls <br /> Our audit will include obtaining an understanding of the entity and its environment, including <br /> internal control, sufficient to assess the risks of material misstatement of the financial statements <br /> and to design the nature, timing, and extent of further audit procedures. Tests of controls may be <br /> performed to test the effectiveness of certain controls that we consider relevant to preventing and <br /> detecting errors and fraud that are material to the financial statements and to preventing and <br /> detecting misstatements resulting from illegal acts and other noncompliance matters that have a <br /> direct and material effect on the financial statements. Our tests, if performed, will be less in <br /> scope than would be necessary to render an opinion on internal control and, accordingly, no <br /> opinion will be expressed in our report on internal control issued pursuant to Government <br /> Auditing Standards. <br />