PNC Bank 2006 Annual Report Download - page 133

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
(a) Previously reported.
(b) 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, 2006.
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, 2006.
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, 2006. The report of
Deloitte & Touche LLP follows.
(b) REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING 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, 2006, 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 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
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