Estee Lauder 2007 Annual Report Download - page 89

Download and view the complete annual report

Please find page 89 of the 2007 Estee Lauder annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 95

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95

The Board of Directors and Stockholders
The Estée Lauder Companies Inc.:
We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control
over Financial Reporting, that The Estée Lauder Companies Inc. maintained effective internal control over fi nancial
reporting as of June 30, 2007, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Estée Lauder Companies Inc.’s man-
agement is responsible for maintaining effective internal control over fi nancial reporting and for its assessment of the
effectiveness of internal control over fi nancial reporting. Our responsibility is to express an opinion on management’s
assessment and an opinion on the effectiveness of the Company’s internal control over fi nancial 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 fi nancial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over fi nancial reporting, evaluating management’s assessment, testing and evaluating
the design and operating effectiveness 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 opinion.
A company’s internal control over fi nancial reporting is a process designed to provide reasonable assurance regarding the
reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with U.S.
generally accepted accounting principles. A company’s internal control over fi nancial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly refl ect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of fi nancial statements in accordance with U.S. 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
fi nancial statements.
Because of its inherent limitations, internal control over fi nancial reporting may not prevent or detect misstatements.
Also, 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.
In our opinion, management’s assessment that The Estée Lauder Companies Inc. maintained effective internal control
over fi nancial reporting as of June 30, 2007, is fairly stated, in all material respects, based on criteria established in Internal
Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Also, in our opinion, The Estée Lauder Companies Inc. maintained, in all material respects, effective internal
control over fi nancial reporting as of June 30, 2007, based on criteria established in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of The Estée Lauder Companies Inc. and subsidiaries as of June 30, 2007
and 2006, and the related consolidated statements of earnings, stockholders’ equity and comprehensive income, and
cash fl ows for each of the years in the three-year period ended June 30, 2007, and our report dated August 27, 2007
expressed an unqualifi ed opinion on those consolidated fi nancial statements.
New York, New York
August 27, 2007
88 THE EST{E LAUDER COMPANIES INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON
INTERNAL CONTROL OVER FINANCIAL REPORTING