October 6, 2000

Joe Doe

Melody Doe

RE: ERP HRMS and Financials Process Integrity Review

Dear Joe and Melody:

As part of the IT Internal Audit teaming arrangement with the ABC Vice President of Internal Audit, Ernst & Young is currently conducting a review of ABCs ERP implementation. The entire IT Internal Audit of ERP at ABC is composed of two phases: Phase I is the general controls review of the Atlanta Operations Center; and Phase II is the process integrity review of the ERP Human Resources (HR) and Financial Accounting/General Ledger (GL) modules.

We have worked with Shelia Doe in planning for this review, and have completed the fieldwork for Phase I. As we move on to Phase II, we would like to communicate our objective, scope and approach for this phase.

The objective of Phase II is to assist ABC in the identification and assessment of key business process risks, and to assist with the design of leading practice control solutions.

Review Scope and Approach

Our review scope will focus on the controls for critical business processes surrounding the ERP HR and GL operations. Our approach utilizes Ernst & Youngs proven application controls methodology, and will be tailored to ABCs environment. We will complete procedures designed to provide information about the effectiveness of the internal controls over the ERP-enabled business processes. Our review will cover both the manual controls that are in place to prepare, process and utilize information from ERP and the application controls that reside within the ERP software programs.

We will update our understanding of the current state of the HR and GL module implementations, including the status of system integration with ERP, as well as manual processes supporting ERP through reviews of documentation, interviews, and process walkthroughs. We will also obtain, through additional interviews, ABC Managements vision and strategy. In connection with this, we will evaluate plans for future enhancements, implementations, and process changes for their alignment with the features and strengths of the ERP modules installed, planned, and available.

As an initial step in understanding your HR and GL processes, we would like to request you to provide us any available documentation of your business processes and procedures. We anticipate conducting our interviews and process walkthroughs with key business users starting Monday, October 16, 2000 and completing our fieldwork on or before Friday, October 20, 2000. We will issue a draft report to you approximately two to three weeks subsequent to the completion of our fieldwork. The final report will be issued shortly thereafter.

John Doe, Arlene Doe, and Jeanette Doe of Ernst & Young will be responsible for conducting the review. Please feel free to contact John at 999-999-9999 should you have questions, or any additional areas or issues you would like us to review.

Sincerely,

John Doe

Manager, Ernst & Young

cc:

J.DoeS.Doe

E&Y LLP