Intel 2006 Annual Report Download - page 106

Table of Contents
Management assessed our internal control over financial reporting as of December 30, 2006, the end of our fiscal year.
Management based its assessment on criteria established in Internal Control—Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission. Management’s assessment included evaluation of elements such
as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and
our overall control environment. This assessment is supported by testing and monitoring performed by both our Internal Audit
organization and our Finance and Enterprise Services organization.
Based on our assessment, management has concluded that our internal control over financial reporting was effective as of the
end of the fiscal year to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. We
reviewed the results of management’s assessment with the Audit Committee of our Board of Directors. In addition, on a
quarterly basis we evaluate any changes to our internal control over financial reporting to determine if material changes
occurred.
Our independent registered public accounting firm, Ernst & Young LLP, audited management’
s assessment and independently
assessed the effectiveness of the company’s internal control over financial reporting. Ernst & Young has issued an attestation
report concurring with management’s assessment, which is included at the end of Part II, Item 8 of this Form 10-K.
Inherent Limitations on Effectiveness of Controls
The company’
s management, including the CEO and CFO, does not expect that our Disclosure Controls or our internal control
over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the control system’
s objectives will be met. The design of a
control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative
to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute
assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within
the company have been detected. These inherent limitations include the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any
system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of
controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in
conditions or deterioration in the degree of compliance with policies or procedures.
ITEM 9B. OTHER INFORMATION
None.
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