PG&E 2009 Annual Report Download - page 117

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of PG&E Corporation and Pacific Gas and
Electric Company (“Utility”) is responsible for establishing
and maintaining adequate internal control over financial
reporting. PG&E Corporation’s and the Utility’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, or
GAAP. Internal control over financial reporting includes
those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and
dispositions of the assets of PG&E Corporation and the
Utility, (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
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 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.
Management assessed the effectiveness of internal
control over financial reporting as of December 31, 2009,
based on the criteria established in Internal Control —
Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway
Commission. Based on its assessment and those criteria,
management has concluded that PG&E Corporation and
the Utility maintained effective internal control over
financial reporting as of December 31, 2009.
Deloitte & Touche LLP, an independent registered
public accounting firm, has audited the Consolidated
Balance Sheets of PG&E Corporation and the Utility, as of
December 31, 2009 and 2008; and PG&E Corporation’s
related consolidated statements of income, equity, and cash
flows and the Utility’s related consolidated statements of
income, shareholders’ equity, and cash flows for each of
the three years in the period ended December 31, 2009. 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
financial reporting as of December 31, 2009, based on
criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of
the Treadway Commission.
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