HomeMy Public PortalAbout2004 Peer Review Report.tifCohen
&Holtz
Accountants Advisors
May 10, 2005
Jacqueline Menendez, Village Manager
Village of Key Biscayne
88 West Mcintyre Street
Key Biscayne, Florida 33149
Dear Jacqueline:
It is with great pleasure I enclose a copy of the 2004 peer review report of Rachlin Cohen &
Holtz LLP. As a condition of membership in the American Institute of Certified Public
Accountants (AICPA), we are required, every three years, to have a peer review performed of our
accounting and audit practice by another qualified CPA firm. This peer review includes a review
of governmental entities and not -for-profit organizations. Government auditing standards
requires us to provide to you a copy of our most recent peer review report. Once again, we
received an unmodified (clean) opinion, without a letter of comments, which is the highest level
of achievement that a firm may receive. We have received this level of achievement since the
commencement of the peer review process in 1978.
As your auditors, we continue to dedicate ourselves to bringing the highest caliber of staff and
professionalism to your engagement.
Sincerely,
Michael D. Futterman, CPA
Partner
Enclosure
Rachlin Cohen & Holtz LLP
One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305.377.8331 • www.rachlin.com
An Independent Member of Baker Tilly International
M I A M I • FO RT LAU D ERDALE • WEST PALM B E A C H • STUART
Altschuler, Melvoin and Glasser LLP
Certified Public Accountants
Partners of
Rachlin Cohen & Holtz LLP and the
Center for Public Company Audit Firms Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of
Rachlin Cohen & Holtz LLP (firm) applicable to non -SEC issuers in effect for the year ended
April 30, 2004. The firm's accounting and auditing practice applicable to SEC issuers was not
reviewed by us since the Public Company Accounting Oversight Board (PCAOB) is responsible
for inspecting that portion of the firm's accounting and auditing practice in accordance with
PCAOB requirements. A system of quality control encompasses the firm's organizational
structure and the policies adopted and procedures established to provide it with reasonable
assurance of complying with professional standards. The elements of quality control are
described in the Statements on Quality Control Standards, issued by the American Institute of
Certified Public Accountants (AICPA). The design of the system, and compliance with it, are the
responsibilities of the firm. Our responsibility is to express an opinion on the design of the
system and the firm's compliance with that system based on our review.
Our review was conducted in accordance with standards established by the Peer Review
Committee of the Center for Public Company Audit Firms and included procedures to plan and
perform the review that are summarized in the attached description of the peer review process.
Our review would not necessarily disclose all weaknesses in the system of quality control or all
instances of lack of compliance with it since it was based on selective tests. Because there are
inherent limitations in the effectiveness of any system of quality control, departures from the
system may occur and not be detected. Also, projection of any evaluation of a system of
quality control to future periods is subject to the risk that the system of quality control may
become inadequate because of changes in conditions or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, the system of quality control for the accounting and auditing practice applicable
to non -SEC issuers of Rachlin Cohen & Holtz LLP in effect for the year ended April 30, 2004 has
been designed to meet the requirements of the quality control standards for an accounting and
auditing practice established by the AICPA and was complied with during the year then ended
to provide the firm with reasonable assurance of complying with professional standards.
/*7e -e--,7
Chicago, Illinois
September 2, 2004
One South Wacker Drive, Suite 800, Chicago, Illinois 60606-3392
312.384.6000 Fax 312.634.3410 www.amgnet.com
Attachment to the Peer Review Report of
Rachlin Cohen & Holtz LLP
Description of the Peer Review Process
Overview
Firms enrolled in the AICPA Center for Public Company Audit Firms (Center) Peer Review
Program have their system of quality control reviewed by independent peers. These reviews
are system and compliance oriented with the objective of evaluating whether:
• The reviewed firm's system of quality control for its accounting and auditing practice
applicable to non -SEC issuers has been designed to meet the requirements of the
Quality Control Standards established by the AICPA.
• The reviewed firm's quality control policies and procedures applicable to non -SEC issuers
were being complied with to provide the firm with reasonable assurance of complying
with professional standards.
A peer review is based on selective tests and directed at assessing whether the design of and
compliance with the firm's system of quality control for its accounting and auditing practice
applicable to non -SEC issuers provides the firm with reasonable, not absolute, assurance of
complying with professional standards. Consequently a peer review on the firm's system of
quality control is not intended to, and does not, provide assurance with respect to any
individual engagement conducted by the firm or that none of the financial statements audited
by the firm should be restated.
The Center's Peer Review Committee (Committee) establishes and maintains review standards.
At regular meetings and through report evaluation task forces, the Committee considers each
peer review, evaluates the reviewer's competence and performance and examines every report,
letter of comments and accompanying response from the reviewed firm that states its
corrective action plan before the peer review is finalized. The Center's staff plays a key role in
overseeing the performance of peer reviews working closely with the peer review teams and
the Committee.
Once the Committee accepts the peer review reports, letters of comments and reviewed firms'
responses, they are maintained in a file available to the public. In some situations, the public
file also includes a signed undertaking by the firm agreeing to specific follow-up action
requested by the Committee.
Firms that perform audits or play a substantial role in the audit of one or more SEC issuers, as
defined by the Public Company Accounting Oversight Board (PCAOB), are required to be
registered with and have their accounting and auditing practice applicable to SEC issuers
inspected by the PCAOB. Therefore, we did not review the firm's accounting and auditing
practice applicable to SEC issuers.
2
Planning the Review for the Firm's Accounting and
Auditing Practice Applicable to Non -SEC Issuers
To plan the review of Rachlin Cohen & Holtz LLP, we obtained an understanding of (1) the
nature and extent of the firm's accounting and auditing practice and (2) the design of the firm's
system of quality control sufficient to assess the inherent and control risks implicit in its
practice. Inherent risks were assessed by obtaining an understanding of the firm's practice,
such as the industries of its clients and other factors of complexity in serving those clients, and
the organization of firm's personnel into practice units. Control risks were assessed by
obtaining an understanding of the design of the firm's system of quality control, including its
audit methodology, and monitoring procedures. Assessing control risk is the process of
evaluating the effectiveness of the reviewed firm's quality control system in preventing the
performance of engagements that do not comply with professional standards.
Performing the Review for the Firm's Accounting and
Auditing Practice Applicable to Non -SEC Issuers
Based on our assessment of the combined level of inherent and control risks, we identified
practice units and selected engagements within those units to test for compliance with the
firm's quality control system. The engagements selected for review included engagements
performed under Government Auditing Standards and audits of employee benefit plans. The
engagements we selected for review represented a cross-section of the firm's accounting and
auditing practice, with emphasis on higher -risk engagements. The engagement reviews
included examining working paper files and reports and interviewing engagement personnel.
The scope of the peer review also included examining selected administrative and personnel
files to determine compliance with the firm's policies and procedures for the elements of quality
control pertaining to independence, integrity and objectivity, personnel management and
acceptance and continuance of clients and engagements. Prior to concluding the review, we
reassessed the adequacy of the scope of the review and conducted an exit conference with firm
management to discuss our findings and recommendations.
3