PNC Bank 2005 Annual Report Download - page 119

119
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A – CONTROLS AND PROCEDURES
(a) MANAGEMENT’S RESPONSIBILITY FOR
INTERNAL CONTROL OVER FINANCIAL
REPORTING
The management of The PNC Financial Services Group,
Inc. and subsidiaries (“PNC”) is responsible for establishing
and maintaining effective internal control over financial
reporting. The internal control system is augmented by
written policies and procedures and by audits performed by
an internal audit staff, which reports to the Audit Committee
of the Board of Directors. Internal auditors test the operation
of the internal control system and report findings to
management and the Audit Committee, and appropriate
corrective and other actions are taken to address identified
control deficiencies and other opportunities for improving
the system. The Audit Committee, composed solely of
independent directors, provides oversight to management’ s
conduct of the financial reporting process.
There are inherent limitations in the effectiveness of any
system of internal control, including the possibility of
human error and circumvention or overriding of controls.
Accordingly, even effective internal control can provide
only reasonable assurance with respect to the reliability of
financial reporting and financial statement preparation.
Further, because of changes in conditions, the effectiveness
of internal control may vary over time.
We performed an evaluation under the supervision and with
the participation of our management, including the
Chairman and Chief Executive Officer and the Chief
Financial Officer, of the effectiveness of PNC’ s internal
control over financial reporting as of December 31, 2005.
This assessment was based on criteria for effective internal
control over financial reporting described in Internal
Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
Based on this assessment, management believes that PNC
maintained effective internal control over financial reporting
as of December 31, 2005.
Deloitte & Touche LLP, the Independent Registered Public
Accounting Firm that audited the Consolidated Financial
Statements included in this Report, has issued a report on
management’ s assessment and on the effectiveness of
PNC’ s internal control over financial reporting as of
December 31, 2005. The report of Deloitte & Touche LLP
follows.
(b) REPORT OF INDEPENDENT REGISTERED
PUBLIC ACOUNTING FIRM
To the Board of Directors and Shareholders of
The PNC Financial Services Group, Inc.
Pittsburgh, Pennsylvania
We have audited management’ s assessment, included in
the accompanying “Management's Responsibility For
Internal Control Over Financial Reporting” that The PNC
Financial Services Group, Inc. and subsidiaries (the
“Company”) maintained effective internal control over
financial reporting as of December 31, 2005, based on
criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. The
Company’ s management is responsible for maintaining
effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over
financial reporting. Our responsibility is to express an
opinion on management’ s assessment and an opinion on
the effectiveness of the Company’ s internal control over
financial reporting based on our audit.
We conducted our audit 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 effective internal control over financial reporting
was maintained in all material respects. Our audit
included obtaining an understanding of internal control
over financial reporting, evaluating management’ s
assessment, testing and evaluating the design and
operating effectiveness of internal control, and
performing such other procedures as we considered
necessary in the circumstances. We believe that our audit
provides 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 simi lar 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