JP Morgan Chase 2008 Annual Report Download - page 131

Report of independent registered public accounting firm
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 accounting
principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the mainte-
nance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the compa-
ny; (ii) 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 company are being made only in
accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding preven-
tion or timely detection of unauthorized acquisition, use, or disposi-
tion 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, 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 pro-
cedures may deteriorate.
February 27, 2009
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
JPMorgan Chase & Co.:
In our opinion, the accompanying consolidated balance sheets and
the related consolidated statements of income, changes in stockhold-
ers’ equity and comprehensive income and cash flows present fairly,
in all material respects, the financial position of JPMorgan Chase &
Co. and its subsidiaries (the “Firm”) at December 31, 2008 and
2007, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2008 in
conformity with accounting principles generally accepted in the
United States of America. Also in our opinion, the Firm maintained, in
all material respects, effective internal control over financial reporting
as of December 31, 2008, based on criteria established in Internal
Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). The
Firm’s management is responsible for these financial statements, for
maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying “Management’s report on
internal control over financial reporting.” Our responsibility is to
express opinions on these financial statements and on the Firm’s
internal control over financial reporting based on our integrated
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 audits to
obtain reasonable assurance about whether the financial statements
are free of material misstatement and whether effective internal con-
trol over financial reporting was maintained in all material respects.
Our audits of the financial statements included examining, on a test
basis, evidence supporting the amounts and disclosures in the finan-
cial statements, assessing the accounting principles used and signifi-
cant estimates made by management, and evaluating the overall
financial statement presentation. Our audit of internal control over
financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operat-
ing effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we consid-
ered necessary in the circumstances. We believe that our audits pro-
vide a reasonable basis for our opinions.
As discussed in Note 4, Note 5, and Note 28 to the Consolidated
Financial Statements, effective January 1, 2007 the Firm adopted
Statement of Financial Accounting Standards No. 157, “Fair Value
Measurement,” Statement of Financial Accounting Standards No.
159, “Fair Value Option for Financial Assets and Financial Liabilities,”
and FASB Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes.”
JPMorgan Chase & Co./ 2008 Annual Report 129
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