American Home Shield 2004 Annual Report Download - page 58

56 ServiceMaster 2004 annual report
management’s report on internal control over financial reporting
report of independent registered public accounting firm
To the Board of Directors and
Shareholders of The ServiceMaster Company
We have audited management’s assessment, included in the
accompanying Management’s Report on Internal Control over
Financial Reporting, that The ServiceMaster Company and sub-
sidiaries (the “Company”) maintained effective internal control
over financial reporting as of December 31, 2004, based on criteria
established in Internal Control - Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway
Commission. 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 manage-
ment’s assessment and an opinion on the effectiveness of the Com-
pany’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 inter-
nal control over financial reporting, evaluating management’s
assessment, testing and evaluating the design and operating effec-
tiveness 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 opinions.
A company’s internal control over financial reporting is a process
designed by, or under the supervision of, the company’s principal
executive and principal financial officers, or persons performing
similar functions, and effected by the company’s board of directors,
management, and other personnel to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with gener-
ally 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
The management of The ServiceMaster Company (“The Com-
pany”) is responsible for establishing and maintaining adequate
internal control over financial reporting. The Company’s internal
control over financial reporting is designed to provide reasonable
assurance to the Company’s management and board of directors
regarding the preparation and fair presentation of published
financial statements.
All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined
to be effective can provide only reasonable assurance with respect
to financial statement preparation and presentation.
Management assessed the effectiveness of the Company’s
internal control over financial reporting as of December 31,
2004. In making this assessment, it used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control - Integrated Framework. Based on
our assessment we believe that, as of December 31, 2004, the
Company’s internal control over financial reporting is effective
based on those criteria.
The Company’s independent registered public accounting firm
has issued an audit report on our assessment of the Company’s
internal control over financial reporting. This report follows.
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 the inherent limitations of internal control over financial
reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to
error or fraud may not be prevented or detected on a timely basis.
Also, projections of any evaluation of the effectiveness of the
internal control over financial reporting to future periods are
subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion, management’s assessment that the Company main-
tained effective internal control over financial reporting as of
December 31, 2004, is fairly stated, in all material respects, based on
the criteria established in Internal Control - Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission. Also in our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting
as of December 31, 2004, based on the criteria established in Internal
Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of
the Public Company Accounting Oversight Board (United
States), the consolidated financial statements as of and for the
year ended December 31, 2004 of the Company and our report
dated February 28, 2005 expressed an unqualified opinion on
those financial statements.
Chicago, Illinois
February 28, 2005