1997 NS Finance - 1996-97 Audit Proposal and Contract

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6 May 23, 1997 The Board of County Commissioners Page 2 controls relevant to an audit of the general purpose financial statements, (iii)reporting on the organization's compliance with laws and regulations,which could have a material effect on the general purpose financial statements, (iv)reporting on whether the schedule of expenditures of federal and state awards is presented fairly in relation to the general purpose financial statements taken as a whole, (v) the reporting on our determination as to whether the organization's internal control provides reasonable assurance of compliance with federal laws and other laws and regulations and(vi) the expression of an opinion on whether the organization complied with specific terms and conditions of its major federal and state programs. Our ability to express that opinion and render those reports, and the wording of our opinion and reports,will,of course,be dependent on the facts and circumstances at the date of such reports. If we are unable to complete our audit or if our auditors' reports require modification,the reasons therefor will be discussed with County management. In addition, we will render a report on illegal acts, as required, depending on the results of our audit procedures. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the general purpose financial statements;therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall general purpose financial statement presentation. We design the audit to obtain reasonable assurance of detecting errors and irregularities that are material to the general purpose financial statements and we will perform tests of the County's compliance with certain provisions of laws, regulations,contracts and grants. However,because of the characteristics of irregularities,particular those involving forgery and collusion,a properly designed and executed audit may not detect such items. Therefore, an audit conducted in accordance with generally accepted auditing standards is designed to obtain reasonable,rather than absolute,assurance that the general purpose financial statements are free of material misstatement. As part of our audit,we will consider the organization's internal control and assess control risk,as required by Government Auditing Standards, for the purpose of establishing a basis for determining the nature, timing and extent of auditing procedures necessary for expressing our opinion on the general purpose financial statements, and not to provide assurance on the organization's internal control. The report on our understanding of the organization's internal control and the assessment of control risk made as part of the organization's general purpose financial statement audit will include (1) the scope of our work in obtaining an understanding of the internal control and in assessing the control risk and (2) the reportable conditions,including the identification of material weaknesses identified as a result of our work in understanding and assessing the control risk.