JCPenney 2004 Annual Report Download - page 26

J.C. PENNEY COMPANY, INC.2 004 ANNUAL REPORT
24
The Board of Directors and Stockholders
J. C. Penney Company, Inc.:
We have audited management’s assessment, included in the
accompanying “Management’s Report on Internal Control Over
Financial Reporting,” that J. C. Penney Company, Inc. maintained
effective internal control over financial reporting as of January 29,
2005, based on criteria established in Internal Control – Integrated
Framework
issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). J. C. Penney Company,
Inc.’s management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effec-
tiveness of internal control over financial reporting. Our responsi-
bility is to express an opinion on management’s assessment and an
opinion on the effectiveness of the Company’s internal control over
financial 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 con-
trol over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control
over financial reporting, evaluating management’s assessment,
testing and evaluating the design and operating effectiveness of
internal control, and performing such other procedures as we con-
sidered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted account-
ing principles. A company’s internal control over financial report-
ing includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial state-
ments in accordance with generally accepted accounting princi-
ples, 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 acquisi-
tion, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projec-
tions 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 J. C. Penney
Company, Inc. maintained effective internal control over financial
reporting as of January 29, 2005, is fairly stated, in all material
respects, based on criteria established in
Internal Control –
Integrated Framework
issued by COSO. Also, in our opinion, J. C.
Penney Company, Inc. maintained, in all material respects, effec-
tive internal control over financial reporting as of January 29, 2005,
based on criteria established in Internal Control – Integrated
Framework
issued by COSO.
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of J. C. Penney Company, Inc. and
subsidiaries as of January 29, 2005 and January 31, 2004, and the
related consolidated statements of operations, stockholders’ equi-
ty and cash flows for each of the years in the three-year period
ended January 29, 2005, and our report dated March 25, 2005
expressed an unqualified opinion on those consolidated financial
statements.
Dallas, Texas
March 25, 2005
The Board of Directors and Stockholders
J. C. Penney Company, Inc.:
We have audited the accompanying consolidated balance
sheets of J. C. Penney Company, Inc. and subsidiaries as of
January 29, 2005 and January 31, 2004, and the related consoli-
dated statements of operations, stockholders’ equity and cash
flows for each of the years in the three-year period ended January
29, 2005. These consolidated financial statements are the respon-
sibility of the Company’s management. Our responsibility is to
express an opinion on these consolidated financial statements
based on our audits.
We conducted our audits 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 the financial state-
ments are free of material misstatement. An audit includes exam-
ining, on a test basis, evidence supporting the amounts and dis-
closures in the financial statements. An audit also includes assess-
ing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial state-
ment presentation. We believe that our audits provide a reason-
able basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of J. C. Penney Company, Inc. and subsidiaries as of January 29,
2005 and January 31, 2004, and the results of their operations and
their cash flows for each of the years in the three-year period
ended January 29, 2005, in conformity with U.S. generally accept-
ed accounting principles.
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
effectiveness of J. C. Penney Company, Inc.’s internal control over
financial reporting as of January 29, 2005, based on criteria estab-
lished in
Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO), and our report dated March 25, 2005
expressed an unqualified opinion on management’s assessment
of, and the effective operation of, internal control over financial
reporting.
Dallas, Texas
March 25, 2005
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM