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Rarnsey Fire Relief Association July 15, 1993 Page 2 An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in tile financial statements; therefore, our audit will involve judgment, about the number of transactions to be examined and the areas to be tested. Also, we will plan and perform tile audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. However, because of the concept of reasonable assurance and because we will not perform a detailed exanination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud or defalcations, may exist and not be detected by us. We will advise you, however, of any matters of that nature that come to our attention. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that might arise during any later periods for which we are not engaged as auditors. We understand that you will provide us with the basic information required for our audit and that you are responsible for the accuracy and completeness of that information. We will advise you about appropriate accounting principles and their application and will assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. This responsibility includes the maintenance of adequate records and related internal control structure policies, the selection and application of accounting principles, and the safeguarding of assets. The assistance to be supplied by your personnel, including the preparation of schedules and analyses of accounts, typing alt cash or other confirmations we request, and locating an/,, invoices selected by us for testing, will be discussed and coordinated with you. Our audit is not specifically designed and cannot be relied on to disclose reportable conditions, that is, significant deficiencies in the design or operation of the internal control structure. However, during the audit, if we become aware of such reportable conditions or ways that we believe management practices can be improved, we wilt communicate them to you in a separate letter. We will also prepare the Association's Annual Federal Return of Organizations Exempt from Income Tax (Form 990) and the State of Minnesota Annual Financial Report. Our fees for these services will be based on the acruaI time spent at our standard hourly rates, plus travel and other out-of-pocket costs such as report production, typing, postage, etc. Our standard hourly rates vaq, according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work progresses and are payable upon presentation. Our fee for the indicated services will not exceed $1,500 unless unexpected circumstances are encountered - at which point we would discuss additional services and fees with you before proceeding. If you intend to publish or otherwise reproduce the f'mancial stafements and make reference to our t::irm name, you agree to provide us with printers' proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final 'reproduced material for our approval before it is distributed.