Loading...
HomeMy WebLinkAboutCoopers & Lybrand; 1988-06-30;certified public accountants 401 West A Slreet San Diego, California 92101 telephone (619) 232-8000 in principal areas of the world May 16, 1988 . ’ Mr. Robert Greaney Costa Real Municipal Water District 5950 El Camino Real Carlsbad, California 92008 Coo ers &L$rand Dear Mr. Greaney: This letter confirms the nature and scope of our engagement to examine the fi- nancial statements of Costa Real Municipal Water District for the year ended June 30, 1988. Our examination of your financial statements will be made in accordance with generally accepted auditing standards and will include such tests of the ac- counting records-and such other auditing procedures as we consider necessary in the circumstances. The objective of such an examination is the expression of our opinion on whether the statements present fairly the financial position, results of operations, and changes in financial position in conformity with generally accepted accounting principles applied on a consistent basis. As a part of our examination, we will make a study and evaluation of the District’s system of internal accounting control to the extent we consider necessary to evaluate the system as required by generally accepted auditing standards. Under these standards, the purpose of such evaluation is to es- tablish a basis for reliance on the system of internal accounting control in determining the nature, timing, and extent of other auditing procedures that are necessary for expressing an opinion on the financial statements and to assist the auditor in planning and performing the examination of the financial state- ment s . Such examinations include procedures designed to detect errors and irregulari- ties that would have a material effect on the financial statements. However, as you are aware, there are inherent limitations in the auditing process: for exam- ple, such examinations are based on the concept of selective testing of the data being examined and are, therefore, subject to the inherent limitation that such matters, if they exist, may not be detected. Likewise, in making our examination we will be aware of the possibility that illegal acts may have occurred. However, it should be recognized that such an examination cannot be expected to provide assurance that illegal acts will be detected . Costa Real Municipal Water District May 16, 1988 Page Two You recognize that the establishment and maintenance of a system of internal accounting control is an important responsibility of management. Appropriate supervisory review procedures are necessary to provide reasonable ,assurance that adopted policies and prescribed procedures are adhered to and to identify errors and irregularities or illegal acts. As part of our aforementioned review of the District's system of internal control, we will inform you of weaknesses that we believe should be corrected and our recommendations in this respect. It is our practice, and the practice of most accounting firms, to base fees on the time and classification of personnel required for the engagement, plus out- of-pocket expenses. We assure you that we will make every effort to keep our fee at a minimum. We would encourage close coordination between our Firm and the District in order that your personnel assist in the preparation of sche- dules, analyses, reconciliations and clerical assistance so that our efforts can be concentrated on matters requiring objective review and professional judgment. We estimate that our fee for the examination of the financial statements of Costa Real Municipal Water District will be $8,750, plus out-of-pocket expenses. If events occur which would increase the extent of our work and, accordingly, the fee, we will fully discuss such events with you prior to commencement of any work. If you concur with the foregoing arrangements, please indicate by signing in the space provided on the attached copy of this letter and return it to us in the enclosed self-addressed envelope. If you have any questions regarding the arrangements, please do not hesitate to contact Bruce Blakley or Pat Cotter. We appreciate the opportunity to serve Costa Real Municipal Water District and assure you of our sincere interest in continuing our professional relationship with your District. Very truly yours, BGB : PMC MR: sp APPROVED : BY DATE Y "