Kraft 2007 Annual Report Download - page 98

Report of Management on Internal Control Over Financial Reporting
Management 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, as amended. Our 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. Our 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 assets;
• 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 are being made only in accordance with management and
director authorization; 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 our internal control over financial reporting as of December 31, 2007. 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 our internal control over financial reporting and testing of the operational
effectiveness of our internal control over financial reporting. We acquired the global biscuit business of Groupe Danone S.A.
(“Danone Biscuit”) on November 30, 2007, and it represents approximately 14.0% of our total assets as of December 31, 2007.
As the acquisition occurred late in 2007, the scope of our assessment of the effectiveness of internal control over financial
reporting does not include Danone Biscuit. This exclusion is in accordance with the SEC’s general guidance that an assessment
of a recently acquired business may be omitted from our scope in the year of acquisition.
Management reviewed the results of our assessment with the Audit Committee of our Board of Directors. Based on this
assessment, management determined that, as of December 31, 2007, we maintained effective internal control over financial
reporting.
PricewaterhouseCoopers LLP, independent registered public accounting firm, who audited and reported on the consolidated
financial statements included in this report, has audited our internal control over financial reporting as of December 31, 2007.
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