Kraft 2008 Annual Report Download - page 86

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Kraft Foods Inc.:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, of shareholders’ equity and of cash flows
present fairly, in all material respects, the financial position of Kraft Foods Inc. and its subsidiaries at December 31, 2007 and December 31, 2006 and the results
of their operations and their cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally
accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company’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
Report of Management on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the
Company’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 control 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 financial statements,
assessing the accounting principles used and significant 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 operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
As discussed in Note 1 and Note 9 to the consolidated financial statements, the Company changed the manner in which it accounts for pension, postretirement
and postemployment plans in 2006 and the manner in which it accounts for uncertain tax positions and the timing of its annual goodwill and indefinite-lived
intangible assets impairment tests in 2007.
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 maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance 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 prevention or timely detection of
unauthorized acquisition, use, or disposition 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 procedures may deteriorate.
As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Groupe Danone S.A.’s global biscuit operations
(“Danone Biscuit”) from its assessment of internal control over financial reporting as of December 31, 2007 because it was acquired by the Company in a
purchase business combination during 2007. We have also excluded Danone Biscuit from our audit of internal control over financial reporting. Danone Biscuit is
a wholly-owned subsidiary whose total assets and total revenues represent 14% and 0%, respectively, of the related consolidated financial statement amounts as
of and for the year ended December 31, 2007.
/s/ PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
February 22, 2008
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Source: KRAFT FOODS INC, 10-K, February 25, 2008 Powered by Morningstar® Document Research℠