06-13-11 Regular Meeting of Fiscal Affairs Committee

Browse Search

Compliance and internal control. In the required report on compliance and internal controls, the auditor shall communicate any significant deficiency or material weakness found during the audit. A significant deficiency shall be defined as a control deficiency, or a combination of control deficiencies that adversely affects the entity's ability to initiate authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles, such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected. A material weakness shall be defined as a significant deficiency or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Significant deficiencies that are also material weaknesses shall be identified as such in the report. In addition, control deficiencies discovered by the auditors that are neither significant deficiencies nor material weaknesses shall be reported in a separate letter to management which shall be referred to in the report on compliance and internal controls. A control deficiency shall be deemed to have occurred whenever the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. The reports on compliance and internal controls shall include all instances of noncompliance. Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the Director of Finance. Reporting to the Fiscal Affairs Committee. The auditors shall assure themselves that the City's Fiscal Affairs Committee is informed of each of the following: 1. The auditor's responsibility under generally accepted auditing standards 2. Significant accounting policies 3. Management judgments and accounting estimates 4. Significant audit adjustments 5. Auditor's judgments about the quality of the entity's accounting principles 6. Other information in documents containing audited financial statements 7. Disagreements with management 8. Management consultation with other accountants 9. Major issues discussed with management prior to retention 10. Difficulties encountered in performing the audit 14