CVS 2015 Annual Report Download - page 53

51
2015 Annual Report
Management’s Report on Internal Control
Over Financial Reporting
We are responsible for establishing and maintaining adequate 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 disposi-
tion 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 receipts 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 31, 2015.
We conducted an assessment of the effectiveness of our internal controls over financial reporting based on the
criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 Framework). 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.
Management’s assessment of the effectiveness of our internal control over financial reporting did not include two
acquisitions, Omnicare, Inc. and the pharmacies and clinics of Target Corporation, consummated during fiscal year
2015. Omnicare, Inc. and the Target Corporation pharmacy and clinic businesses are included in the Company’s
2015 consolidated financial statements and represent 18% of total assets as of December 31, 2015 and 2% of net
revenues for the year then ended.
Based on our assessment, 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 31, 2015.
Ernst & Young 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 an audit of internal control over financial reporting. Their
accompanying reports are based upon audits conducted in accordance with the standards of the Public Company
Accounting Oversight Board (United States).
February 9, 2016