CVS 2006 Annual Report Download - page 31

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28 CVS Corporation
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
We are responsible for establishing and maintaining effective internal control over financial reporting. Our Company’s internal control over financial
reporting includes those policies and procedures that pertain to the Company’s ability to record, process, summarize and report a system of internal
accounting controls and procedures to provide reasonable assurance, at an appropriate cost/benefit relationship, that the unauthorized acquisition,
use or disposition of assets are prevented or timely detected and that transactions are authorized, recorded and reported properly to permit the
preparation of financial statements in accordance with generally accepted accounting principles (GAAP) and receipt and expenditures are duly
authorized. In order to ensure the Company’s internal control over financial reporting is effective, management regularly assesses such controls and
did so most recently for its financial reporting as of December 30, 2006.
We conduct an evaluation of the effectiveness of our internal controls over financial reporting based on the framework in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation,
evaluation of the design effectiveness and testing of the operating effectiveness of controls. Our system of internal control over financial reporting is
enhanced by periodic reviews by our internal auditors, written policies and procedures and a written Code of Conduct adopted by our Company’s
Board of Directors, applicable to all employees of our Company. In addition, we have an internal Disclosure Committee, comprised of management
from each functional area within the Company, which performs a separate review of our disclosure controls and procedures. There are inherent
limitations in the effectiveness of any system of internal controls over financial reporting.
Based on our evaluation, we conclude our Company’s internal control over financial reporting is effective and provides reasonable assurance that
assets are safeguarded and that the financial records are reliable for preparing financial statements as of December 30, 2006.
KPMG LLP, independent registered public accounting firm, is appointed by the Board of Directors and ratified by our Company’s shareholders.
They were engaged to render an opinion regarding the fair presentation of our consolidated financial statements as well as conducting a review of
the system of internal accounting controls. Their accompanying report is based upon an audit conducted in accordance with the Public Company
Accounting Oversight Board (United States) and includes an attestation on management’s assessment of internal controls over financial reporting.
February 27, 2007