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. . . . . . ~ ~ ~ ~ ~ ~ . ~ ~ ~ ~ ~ . oSUNNY clSLES u BEACH Transaction and Control Tests Substantive transaction and control tests are often combined to use one sample to achieve more than one audit objective. We would also test the controls to verify that the transactions were properly authorized in accordance with the City's procedures. Compliance Tests Compliance tests with laws and regulations are included with the tests of transactions and controls. Additional samples are sometimes necessary to test specific laws and regulations. Sample sizes for compliance testing are determined based on the number of transactions and the significance of the requirement. Use of EDP Software State-of-the-art audit techniques data extraction software allows us to audit through the computer, which is in addition to the basic procedures performed around the City's computer system. I . ~ . . . . . . . . . . . Phase III: Evaluate Audit Results This phase includes a review of all audit documentation by the partners to ensure that testing and documentation support the conclusions reached. This phase also includes preliminary discussions with management of the audit findings. Phase IV: Completion and Delivery In this phase of the audit, the engagement team will complete the tasks related to the closing of year-end balances and financial reporting. This will include final testing in areas including compliance, balance sheet accounts, revenues and expenditures. The team will assist in preparing the financial statements and the notes to the financial statements. The draft audit report for the City will be delivered before the end of February. All reports will be reviewed with management before issuance, and the engagement partner will be available to meet with the appropriate City officials to discuss the reports and address any questions that they may have. MONITORING AND COMMUNICATION The firm's engagement team will hold progress conferences throughout the entire audit process with key finance department personnel who have oversight responsibility for financial reporting. This ensures that they are informed of the following: . The auditor's responsibility under generally accepted auditing standards and Government Auditing Standards . Significant accounting policies · Management's judgments and accounting estimates . Significant audit adjustments · Other information in documents containing audited financial statements . Disagreements with management · Management consultation with other accountants · Major issues discussed with management prior to retention · Difficulties encountered in performing the audit Should Rachlin's audit team become aware of fraud, irregularities or illegal acts, they will make an immediate written report to the Director of Finance, the City Manager and the City Commission, as appropriate. Rachl-Inwhen Rachlin Cohen & Holtz LLP '&Holtz Proposal for Independent Auditing Services Accountants. Advisors Page - 21