CenterPoint Energy 2014 Annual Report Download - page 130

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) pertains to the assessment of internal control
effectiveness in an organization. This framework was first implemented in 1992 and revised in 2013. CenterPoint Energy utilizes this
framework for assessing the effectiveness of our internal controls and transitioned to the new 2013 COSO framework during the fourth quarter
of 2014.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting is defined in Rule 13a-15(f) or 15d-
15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or
under the supervision of, the company’s principal executive and principal financial officers 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 generally accepted accounting principles and includes those policies and procedures that:
Management has designed its internal control over financial reporting to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of
America. Management’
s assessment included review and testing of both the design effectiveness and operating effectiveness of controls over all
relevant assertions related to all significant accounts and disclosures in the 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. 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.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial
officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in
Internal
Control — Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our
evaluation under the framework in Internal Control — Integrated Framework
(2013), our management has concluded that our internal control
over financial reporting was effective as of December 31, 2014 .
Deloitte & Touche LLP, the Company’
s independent registered public accounting firm, has issued an attestation report on the effectiveness
of our internal control over financial reporting as of December 31, 2014 which is set forth below.
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•
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets
of the company;
•
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
• 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.