PG&E 2008 Annual Report Download - page 149

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147
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
refl ect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of fi nancial
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 (3) 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 fi nancial statements.
Because of the inherent limitations of internal control
over fi nancial reporting, including the possibility of collusion
or improper management override of controls, material
misstatements due to error or fraud may not be prevented
or detected on a timely basis. Also, projections of any
evaluation of the effectiveness of the internal control over
fi nancial reporting to future periods are subject to the risk
that the controls may become inadequate because of changes
in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, the consolidated fi nancial statements
referred to above present fairly, in all material respects,
the fi nancial position of the Company and of the Utility
as of December 31, 2008 and 2007, and the respective results
of their operations and their cash fl ows for each of the three
years in the period ended December 31, 2008, in conformity
with accounting principles generally accepted in the United
States of America. Also, in our opinion, the Company and
the Utility maintained, in all material respects, effective
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 Sponsoring
Organizations of the Treadway Commission.
As discussed in Note 2 of the Notes to the Consolidated
Financial Statements, in January 2008 the Company and
the Utility adopted new accounting standards addressing
fair value measurement and an amendment to an interpreta-
tion of accounting standards for offsetting amounts related
to certain contracts. In 2007, the Company and the Utility
adopted a new interpretation of accounting standards for
uncertainty in income taxes. In 2006, the Company and
the Utility adopted new accounting standards for defi ned
benefi t pensions and other postretirement plans and share-
based payments.
DELOITTE & TOUCHE LLP
February 19, 2009
San Francisco, CA