Kraft 2004 Annual Report Download - page 46

Item 8. Financial Statements and Supplementary Data.
Report of Management on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities
Exchange Act of 1934. The 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 accounting principles generally accepted
in the United States of America. The Company’s internal control over financial reporting includes those
written policies and procedures that:
• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with accounting principles generally accepted in the United
States of America;
• provide reasonable assurance that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and directors of the Company; and
• provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of assets that could have a material effect on the consolidated
financial statements.
Internal control over financial reporting includes the controls themselves, monitoring and internal
auditing practices and actions taken to correct deficiencies as identified.
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 assessed the effectiveness of the Company’s internal control over financial reporting
as of December 31, 2004. Management based this assessment on criteria for effective internal control
over financial reporting described in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (‘‘COSO’’). Management’s assessment
included an evaluation of the design of the Company’s internal control over financial reporting and
testing of the operational effectiveness of the Company’s internal control over financial reporting.
Management reviewed the results of its assessment with the Audit Committee of the Company’s Board
of Directors.
Based on this assessment, management determined that, as of December 31, 2004, the Company
maintained effective internal control over financial reporting.
PricewaterhouseCoopers LLP, independent registered public accounting firm, who audited and
reported on the consolidated financial statements of the Company included in this report, has issued an
attestation report on management’s assessment of internal control over financial reporting.
February 2, 2005
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