PG&E 2008 Annual Report Download - page 148

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146
To the Board of Directors and
Shareholders of PG&E Corporation and
Pacifi c Gas and Electric Company
San Francisco, California
We have audited the accompanying consolidated balance
sheets of PG&E Corporation and subsidiaries (the “Company”)
and of Pacifi c Gas and Electric Company and subsidiaries
(the “Utility”) as of December 31, 2008 and 2007, and the
related consolidated statements of income, shareholders’
equity, and cash fl ows for each of the three years in the
period ended December 31, 2008. We also have audited the
Company’s and the Utility’s internal control over fi nancial
reporting as of December 31, 2008, based on criteria estab-
lished in Internal Control — Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway
Commission. The Company’s and the Utility’s management
is responsible for these fi nancial statements, for maintaining
effective internal control over fi nancial reporting, and for
its assessment of the effectiveness of internal control over
fi nancial reporting, included in the accompanying Manage-
ment’s Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on these fi nancial
statements and an opinion on the Company’s and the
Utility’s internal control over fi nancial reporting based
on our audits.
We conducted our audits in accordance with the stan-
dards 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 fi nancial statements are free of material misstate-
ment and whether effective internal control over fi nancial
reporting was maintained in all material respects. Our audits
of the fi nancial statements included examining, on a test
basis, evidence supporting the amounts and disclosures in
the fi nancial statements, assessing the accounting principles
used and signifi cant estimates made by management, and
evaluating the overall fi nancial statement presentation. Our
audits of internal control over fi nancial reporting included
obtaining an understanding of internal control over fi nancial
reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effec-
tiveness 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.
A company’s internal control over fi nancial reporting
is a process designed by, or under the supervision of, the
company’s principal executive and principal fi nancial offi cers,
or persons performing similar functions, and effected by
the company’s board of directors, management, and other
personnel to provide reasonable assurance regarding the
reliability of fi nancial reporting and the preparation of
fi nancial statements for external purposes in accordance
with generally accepted accounting principles. A company’s
internal control over fi nancial reporting includes those
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM