AXP DISCOVERY FUND INC
NSAR-B, EX-99, 2000-09-27
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  Independent Auditors' Report on Internal Accounting Control


The Board of Directors and Shareholders
AXP Discovery Fund, Inc.:

In planning and performing our audits of the financial statements
of AXP Discovery Fund, Inc. for the year ended
July 31, 2000, we considered its internal control,
including control activities 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.

The management of AXP Discovery Fund, Inc. is responsible
for establishing and maintaining internal control. In
fulfilling this responsibility, estimates and judgments
by management are required to assess the expected
benefits and related costs of internal controls.
Generally, controls that are relevant to an audit
pertain to the
entity's objective of preparing financial statement
for external purposes that are fairly presented in
conformity with generally accepted accounting principles.
Those controls include the safeguarding of assets against
unauthorized acquisition, use, or disposition.

Because of inherent limitations in internal control ,
errors or irregularities may occur and not be detected.
Also, projection of any evaluation of internal control
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 would not
necessarily disclose all matters in the internal control 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 one or more of the internal
control components 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 and its operation,
including controls for safeguarding securities, that we
consider to be a material weakness as defined above.

This report is intended solely for the information and use
of management, the Board of Directors of AXP Discovery
Fund, Inc., and the Securities and Exchange Commission
and is not intended to be and should not be used by anyone
other than these specified parties.

KPMG LLP

Minneapolis, Minnesota
September 1, 2000




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