AT&T Wireless 2006 Annual Report Download - page 84

82 : : 2006 AT&T Annual Report
The Board of Directors and Stockholders
AT&T Inc.
We have audited management’s assessment as described in the “Assessment of Internal Control,” included in the accompanying
Report of Management, that AT&T Inc. (the Company) maintained effective internal control over financial reporting as of December
31, 2006, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO criteria). The Company’s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the
Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effective-
ness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As indicated in the accompanying “Assessment of Internal Control,” management’s assessment of and conclusion on the
effectiveness of internal control over financial reporting did not include the internal controls of BellSouth Corporation (BellSouth)
or AT&T Mobility LLC (formerly Cingular Wireless LLC), which were acquired on December 29, 2006, and are included in the 2006
consolidated financial statements of the Company. At December 31, 2006, and for the period from December 29 through Decem-
ber 31, 2006, total assets and total revenues subject to BellSouth’s internal control over financial reporting represented 27% and
0.2% of the Company’s consolidated total assets and total revenues as of and for the year ended December 31, 2006, and total
assets and total revenues subject to AT&T Mobility LLC’s internal control over financial reporting represented 36% and 0.3% of the
Company’s consolidated total assets and total revenues as of and for the year ended December 31, 2006. Our audit of internal
control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting
of BellSouth or AT&T Mobility LLC.
In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of
December 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the
COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of the Company as of December 31, 2006 and 2005, and the related consolidated statements of
income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2006, of the Company
and our report dated February 15, 2007, expressed an unqualified opinion thereon.
San Antonio, Texas
February 15, 2007
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting