5.1. ERMUSR 04-13-2010 - Laserfiche WebLink

Home Browse Search

~ / Ells River Municipal Utilities Apri16, 2010 I' Page 3 ~I C~ ~ ~^_ Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events, Certain accounting estimates are particularly sensitive because of their significance to the fv.~ancial statements and because of the possibility that future events affecting them may differ significantly tom those expected, The most sensitive estimates affecting the financial statements were capital asset basis, depreciation, compensated absences and other postemploylnent benefits, We evaluated the key factors and assumptions used to develop these accounting estimates in determining that it is reasonable ins relation to the financial staten~ents taken as a whole. The disclosures in the financial statements are neutz~al, consistent, and clear, Ce~•tain financial statement disclosures are particularly sensitive because of therl• signif canoe to financial statement users, Difficulties encountered in performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit, Corrected and Uncorrected Misstatements Pz•ofessional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management, Management has corrected all such misstatements, ha addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole, Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report, We are pleased to report that no such disagreements arose during the course of our audit, Management 13epresentations We have requested certain representations from management that are included its the management representation letter dated Apri16, 2010, Management Consultations with ether independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, sinilar to obtaining a "second opinion" on certain situations, zf a consultation involves application of an accounting principle to the governmental unit's financial statements or a dete~~nination of the type of auditor's opinion that may be expressed on those statements, oiu professional standards require tlae consulting accountant to check with us to determine that the consultant has all the relevant facts, To our knowledge, there were no such consultations with other accountants, ether Audit Findings or issues We generally discuss a va1•iety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Utilities' auditors, However, these discussions occurred in the iaormal course of our professional relationship and out• responses were not a condition to our retention, 11'tiY1~~,G-lt;El1C:~?uS, C'.C)Ill