PG&E 2009 Annual Report Download - page 118

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of PG&E Corporation and
Pacific 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 Pacific Gas and Electric Company and
subsidiaries (the “Utility”) as of December 31, 2009 and
2008, and the Company’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. We also have audited the
Company’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. The Company’s and the Utility’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 Management’s Report on Internal Control Over
Financial Reporting. Our responsibility is to express an
opinion on these financial statements and an opinion on
the Company’s and the Utility’s internal control over
financial reporting based on our 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 audit 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 audits 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.
A company’s internal control over financial reporting is
a process designed by, or under the supervision of, the
company’s principal executive and principal financial
officers, 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 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 (1) pertain to
the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) 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 (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 financial statements.
114