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SIGNATURE LESLIE L. OGG
TITLE VICE PRESIDENT
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KPMG Peat Marwick LLP
4200 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
Independent Auditors' Report on Internal Accounting Control
The Board of Directors and Shareholders
IDS Discovery Fund, Inc.:
In planning and performing our audits of the financial statements of IDS
Discovery Fund, Inc., for the year ended July 31, 1998, we considered their
internal control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control structure.
The management of IDS Discovery Fund, Inc. is responsible for establishing and
maintaining a system of internal accounting control. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of financial statements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their
assigned functions. However, we noted no matter involving the internal control
structure, including procedures for safeguarding securities, that we consider to
be a material weakness as defined above as of July 31, 1998.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 4, 1998
