PG&E 2008 Annual Report Download - page 147

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145
Management of PG&E Corporation and Pacifi c Gas and
Electric Company (the “Utility”) is responsible for establish-
ing and maintaining adequate internal control over fi nancial
reporting. PG&E Corporation’s and the Utility’s internal
control over fi nancial reporting is a process designed to
provide reasonable assurance regarding the reliability of
fi nancial reporting and the preparation of fi nancial state-
ments for external purposes in accordance with generally
accepted accounting principles, or GAAP. Internal control
over fi nancial reporting includes those policies and proce-
dures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly refl ect the trans-
actions and dispositions of the assets of PG&E Corporation
and the Utility, (2) provide reasonable assurance that trans-
actions are recorded as necessary to permit preparation of
fi nancial statements in accordance with GAAP and that
receipts and expenditures are being made only in accordance
with authorizations of management and directors of PG&E
Corporation and the Utility, and (3) provide reasonable
assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of assets that
could have a material effect on the fi nancial statements.
Because of its inherent limitations, internal control over
fi nancial 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 internal
control over fi nancial reporting as of December 31, 2008,
based on the criteria established in Internal Control —
Integrated Framework issued by the Committee of Spon-
soring Organizations of the Treadway Commission. Based
on its assessment and those criteria, management has con-
cluded that PG&E Corporation and the Utility maintained
effective internal control over fi nancial reporting as of
December 31, 2008.
Deloitte & Touche LLP, an independent registered public
accounting fi rm, has audited the Consolidated Balance Sheets
of PG&E Corporation and the Utility as of December 31,
2008 and 2007, and the related Consolidated Statements
of Income, Shareholders’ Equity, and Cash Flows ended
December 31, 2008 for each of the three years in the period
ended December 31, 2008. As stated in their report, which
is included in this annual report, Deloitte & Touche LLP
also has audited PG&E Corporation’s and the Utility’s
internal control over fi nancial 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.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING