Kraft 2005 Annual Report Download - page 51

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MERRILL CORPORATION ABLIJDE// 7-MAR-06 14:42 DISK126:[06CHI5.06CHI1135]DP1135A.;7
mrll.fmt Free: 50D*/120D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0
DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;51
KRAFT FOODS-FSC CERTIFIED-10K/AR Proj: P1102CHI06 Job: 06CHI1135 File: DP1135A.;7
Merrill Corporation/Chicago (312) 786-6300 Page Dim: 8.250X 10.750Copy Dim: 38. X 54.3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Kraft Foods Inc.:
We have completed integrated audits of Kraft Foods Inc.’s 2005 and 2004 consolidated financial
statements and of its internal control over financial reporting as of December 31, 2005, and an audit of its
2003 consolidated financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Our opinions on Kraft Foods Inc.’s 2005, 2004, and 2003
consolidated financial statements and on its internal control over financial reporting as of December 31,
2005, based on our audits, are presented below.
Consolidated financial statements
In our opinion, the accompanying consolidated balance sheets and the related consolidated
statements of earnings, shareholders’ equity, and cash flows, present fairly, in all material respects, the
financial position of Kraft Foods Inc. and its subsidiaries at December 31, 2005 and 2004, and the results
of their operations and their cash flows for each of the three years in the period ended December 31,
2005 in conformity with accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of Kraft Foods Inc.’s management. Our responsibility is to
express an opinion on these financial statements based on our audits. We conducted our audits of these
statements 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 statements are free of material misstatement. An audit of financial
statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
Internal control over financial reporting
Also, in our opinion, management’s assessment, included in the Report of Management on Internal
Control Over Financial Reporting dated February 7, 2006, that Kraft Foods Inc. maintained effective
internal control over financial reporting as of December 31, 2005 based on criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (‘‘COSO’’), is fairly stated, in all material respects, based on those criteria. Furthermore, in
our opinion, Kraft Foods Inc. maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated
Framework issued by the COSO. Kraft Foods Inc.’s management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal control over
financial reporting. Our responsibility is to express opinions on management’s assessment and on the
effectiveness of Kraft Foods Inc.’s internal control over financial reporting based on our audit. We
conducted our audit of internal control over financial reporting 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 control over financial
reporting was maintained in all material respects. An audit of internal control over financial reporting
includes 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 consider necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinions.
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
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