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CONEJO RECREATIONAND PARK DISTRICT AND THE MOUNTAINS RECREATION AND CONSERVATION AUTHORITY PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Specific audit approach (continued) There are three classifications of internal control deficiencies. We will work carefully with your staff to ensure the correct classification of any identified internal control deficiencies. The three classifications are as follows: • Control deficiency- a minor internal control deficiency that can be communicated either verbally or in writing to management. • Significant deficiency - a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance, and must be communicated in writing. • Material weakness - a deficiency, or a combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis, and must be communicated in writing to those charged with governance. When we prepare internal control recommendations, we obtain a thorough understanding of the specific circumstances surrounding the finding, and discuss the matters with management prior to drafting the letter. We work with your staff to ensure that the recommendation is reasonable and practical to implement. Audit timing Audit segments Proposed timing Auditor Transition Schedule to meet with your prior auditor to review their working papers. May 2019 Segment 1 - Planning, pre -audit administration and internal control testing Entrance Conference to meet with management for pre -audit planning, and to obtain an understanding of systems, internal controls, and current -year issues. Perform interim audit fieldwork and tests of internal controls. May/June 2019 Provide management with a detailed listing of items needed to perform the audit, including the timing of when items are needed Segment 2 - Substantive testing Send confirmations of cash, investment, and other accounts as deemed necessary. Perform substantive audit fieldwork and hold Exit Conference with Management to summarize the fieldwork and review findings. Segment 3 - Report preparation/audit conclusion (workpaper review) We will have draft financial statements, reports, and recommendations to management Issuance of all final reports. `` , AICPA GAQC Member IPAe May/June 2019 July 2019 August/September 2019 September/October 2019 November 2019