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PROPOSAL FOR CITY OF SUNNY ISLES BEACH, FLORIDA RFP NO. 22-02-01 28 PHASE I: STRATEGIC PLANNING PROCEDURES FOR INTERNAL CONTROL A thorough understanding of the City and its operating environment is essential for developing an efficient, cost-effective audit plan. During this phase, the engagement partner and key supervisory personnel will meet with the appropriate personnel to ensure we have an understanding of your operations. You will also have the opportunity to express your expectations regarding the services that we will provide. This effort will be coordinated so that there will be minimal disruption to your staff. During this phase, we will perform the following activities: Review the current regulatory and statutory compliance requirements within which the City operates. This will include a review of applicable state regulations; ordinances, contracts, and other agreements; meeting minutes of the City Commission, as applicable; Review major sources of information such as budgets, organization charts, procedures manuals, financial systems and management information systems; Determine the most practical and effective way to apply computer-aided audit tools to convert and analyze data and generate reports; Performance of fraud inquiries and retrospective review; Determination of materiality levels; Regarding controls that are relevant to the audit, Marcum will evaluate the design of the controls and determine whether they have been properly designed and implemented; Reevaluation of City provided major fund determination worksheet; Documentation of current year activity expectations and performance of preliminary analytical procedures; Review internal control systems, including determining an audit risk assessment; Consider the methods used to process accounting information that influence the design of the internal control system. This includes understanding the design of relevant policies, procedures, and records and whether they have been placed in operation; Design audit programs to ensure that they incorporate financial statement assertions, specific audit objectives and appropriate audit procedures to achieve the specified objectives; Identify and resolve accounting, auditing and reporting matters; and Prepare detailed audit plans, including a list of schedules to be prepared by the City’s personnel. RISK-BASED AUDIT TECHNOLOGIES The Firm employs a risk-based approach early in the audit process. This approach considers how the overall risk identified in the general risk analysis affects specific account balances. We consider, in part: Relative significance of the account to the financial statements as a whole; Volume of transactions; Susceptibility of the account to fraud;