JP Morgan Chase 2006 Annual Report Download - page 90

88 JPMorgan Chase & Co. / 2006 Annual Report
Management of JPMorgan Chase & Co. is responsible for establishing and
maintaining adequate internal control over financial reporting. Internal control
over financial reporting is a process designed by, or under the supervision
of, the Firm’s principal executive and principal financial officers, or persons
performing similar functions, and effected by JPMorgan Chase’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 accounting principles
generally accepted in the United States of America.
JPMorgan Chase’s internal control over financial reporting 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 Firm’s assets; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accor-
dance with generally accepted accounting principles, and that receipts and
expenditures of the Firm are being made only in accordance with authorizations
of JPMorgan Chase’s management and directors; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Firm’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, 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.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
JPMorgan Chase & Co.
Management has completed an assessment of the effectiveness of the Firm’s
internal control over financial reporting as of December 31, 2006. In making
the assessment, management used the framework in “Internal Control –
Integrated Framework” promulgated by the Committee of Sponsoring
Organizations of the Treadway Commission, commonly referred to as the
“COSO” criteria.
Based upon the assessment performed, management concluded that as of
December 31, 2006, JPMorgan Chase’s internal control over financial reporting
was effective based upon the COSO criteria. Additionally, based upon manage-
ment’s assessment, the Firm determined that there were no material weak-
nesses in its internal control over financial reporting as of December 31, 2006.
Management’s assessment of the effectiveness of the Firm’s internal control
over financial reporting as of December 31, 2006, has been audited by
PricewaterhouseCoopers LLP, JPMorgan Chase’s independent registered public
accounting firm, who also audited the Firm’s financial statements as of and
for the year ended December 31, 2006, as stated in their report which is
included herein.
James Dimon
Chairman and Chief Executive Officer
Michael J. Cavanagh
Executive Vice President and Chief Financial Officer
February 21, 2007