Agmt12 Badawi and Associations formerly Caporicci & Larson

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Consultant will aiso inform Agency of any violations of laws or governmental regulations that come to Consultant's attention, unless clearly inconsequential. Consultant's responsibility as auditor is limited to the period covered by audit and does not extend to later periods for which not engaged as auditors. Procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. Consultant will request written representations from Agency attorneys as part of the engagement, and they may bill Agency for responding to this inquiry. At the conclusion of audit, Consultant will require certain written representations from Agency about the financial statements and related matters. Audit Procedures—Internal Controls The audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Audifing Standards. An audit is not designed to provide assurance on internal control or to identify significant deficiencies. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards and Government Auditing Standards. Audit Procedures—Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, Consultant will perform tests of the Agency's compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. However, the objective of audit will not be to provide an opinion on overall compliance and we will not express such an opinion in report on compliance issued pursuant to Government Auditing Standards. Communication with Those Charqed with Governance As part of engagement, Consultant is responsible for communicating significant matters related to the audit that are, in Consultant's professional judgment, relevant to Agency's responsibilities in overseeing the financial reporting process as well as other matters Consultant believe should be communicated to those charged with governance. Generally accepted auditing standards do not require the auditor to design procedures for the purpose of identifying other matters to communicate with those charged with governance. Such matters include, but are not limited to, (1) the initial selection of and changes in significant accounting policies and their application; (2) the process used by management in formulating particularly sensitive accounting estimates and the basis for our conclusions regarding the reasonableness of those estimates; (3) all passed audit adjustments; (4) any disagreements with management, whether or not satisfactorily resolved, about matters that individually or in the aggregate could be significant to the financial statements or our report; (5) our views about matters that were the subject of managemenYs consultation with other accountants about auditing and accounting matters; (6) major issues that were discussed with management in connection with the retention of our services, including, among other matters, any discussions regarding the application of accounting principles and auditing standards; (7) serious difficulties that we encountered in dealing with management related to the performance of the audit; and (8) matters relating to our independence as your auditors. ATTY/AGR/2012.153/BADAWI ASSOC—SA REV:09-18-12 VR Page 11 of 16