Emerson 2006 Annual Report Download - page 24

Financial Review
Financial Review
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The Company’s management is responsible for the integrity and
accuracy of the nancial statements. Management believes that
the nancial statements for the three years ended September 30,
2006, have been prepared in conformity with U.S. generally
accepted accounting principles appropriate in the circumstances.
In preparing the nancial statements, management makes
informed judgments and estimates where necessary to reect
the expected effects of events and transactions that have not
been completed. The Company’s disclosure controls and proce-
dures ensure that material information required to be disclosed
is recorded, processed, summarized and communicated to
management and reported within the required time periods.
In meeting its responsibility for the reliability of the nancial
statements, management relies on a system of internal
accounting control. This system is designed to provide reason-
able assurance that assets are safeguarded and transactions are
executed in accordance with management’s authorization and
recorded properly to permit the preparation of nancial state-
ments in accordance with U.S. generally accepted accounting
principles. The design of this system recognizes that errors or
irregularities may occur and that estimates and judgments are
required to assess the relative cost and expected benets of the
controls. Management believes that the Company’s accounting
controls provide reasonable assurance that errors or irregularities
that could be material to the nancial statements are prevented
or would be detected within a timely period.
The Audit Committee of the Board of Directors, which is
composed solely of independent Directors, is responsible for
overseeing the Company’s nancial reporting process. The Audit
Committee meets with management and the internal auditors
periodically to review the work of each and to monitor the
discharge by each of its responsibilities. The Audit Committee
also meets periodically with the independent auditors who have
free access to the Audit Committee and the Board of Directors to
discuss the quality and acceptability of the Company’s nancial
reporting, internal controls, as well as non-audit-related services.
The independent auditors are engaged to express an opinion
on the Company’s consolidated nancial statements and on the
Company’s internal control over nancial reporting. Their opin-
ions are based on procedures which they believe to be sufcient
to provide reasonable assurance that the nancial statements
contain no material errors and that the Company’s internal
controls are effective.
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The Company’s management is responsible for establishing
and maintaining adequate internal control over nancial
reporting for the Company. With the participation of the Chief
Executive Ofcer and the Chief Financial Ofcer, management
conducted an evaluation of the effectiveness of internal control
over nancial reporting based on the framework and the
criteria established in Internal Control – Integrated Framework,
issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management
has concluded that internal control over nancial reporting was
effective as of September 30, 2006.
The Company’s auditor, KPMG LLP, an independent registered
public accounting rm, has issued an audit report on manage-
ment’s assessment of internal control over nancial reporting.
Walter J. Galvin
Senior Executive Vice President
and Chief Financial Ofcer
David N. Farr
Chairman of the Board,
Chief Executive Ofcer,
and President
Financial Review