1997 NS Finance - 1996-97 Audit Proposal and Contract

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7 May 23, 1997 The Board of County Commissioners Page 3 Our auditing 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. As part of our audit of compliance with the requirements of major federal and state award programs, we will obtain an understanding of the organization's internal control related to administering major federal and state awards and we will assess risk as required by OMB Circular A-133 for the purpose of establishing the nature, timing and extent of auditing procedures necessary for expressing our opinion concerning compliance with laws and regulations related to major federal and state award programs. As required by OMB Circular A-133 and the State Single Audit Implementation Act, our audit will also include tests of transactions related to federal and state award programs for compliance with applicable laws and regulations. However,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,irregularities or illegal acts,including fraud or defalcations,may exist and not be detected by us. We will advise you,however,of any matters of that nature that come to our attention,and will include such matters in the reports required for an audit in accordance with OMB Circular A-133. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that arise during any later periods for which we have not been engaged as.auditors and for which we have performed no auditing procedures. We understand that the County's employees will type all cash or other confirmations that we request and will locate any invoices selected by us for testing. We understand that our reports on the County's internal control structure as part of the general purpose financial statement audit and on compliance with laws and regulations are intended for the information of the County Manager,Members of the Board of County Commissioners,management and officials of federal and state agencies. Management's Responsibility The general purpose financial statements are the responsibility of management. In this regard, management has the responsibility for, among other things: establishing and maintaining effective internal control;for identifying and ensuring compliance with laws,regulations, contracts and grants and for establishing and maintaining effective internal control to assure such compliance with those requirements applicable to its activities;for properly recording transactions in the accounting records; for making appropriate accounting estimates;for safeguarding assets;for the overall accuracy of the general purpose financial statements and their conformity with general accepted accounting principles;