Pizza Hut 2004 Annual Report Download - page 78

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Report฀of฀Independent฀Registered฀Public฀Accounting฀Firm
The฀Board฀of฀Directors฀and฀Shareholders฀
YUM!฀Brands,฀Inc.:
We฀have฀audited฀management’s฀assessment,฀included฀in฀Management’s฀Report฀on฀Internal฀Control฀over฀Financial฀Reporting,฀
appearing฀on฀page฀74฀of฀the฀Company’s฀Annual฀Report฀for฀the฀fiscal฀year฀ended฀December฀25,฀2004,฀that฀YUM!฀Brands,฀Inc.฀and฀
Subsidiaries฀(“YUM”)฀maintained฀effective฀internal฀control฀over฀financial฀reporting฀as฀of฀December฀25,฀2004,฀based฀on฀criteria฀
established฀in฀Internal฀Control฀—฀Integrated฀Framework฀issued฀by฀the฀Committee฀of฀Sponsoring฀Organizations฀of฀the฀Treadway฀
Commission฀(COSO).฀YUM’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฀opinion.
A฀company’s฀internal฀control฀over฀financial฀reporting฀is฀a฀process฀designed฀to฀provide฀reasonable฀assurance฀regarding฀the฀reli-
ability฀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฀assur-
ance฀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.
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.
In฀our฀opinion,฀management’s฀assessment฀that฀YUM฀maintained฀effective฀internal฀control฀over฀financial฀reporting฀as฀of฀
December฀25,฀2004,฀is฀fairly฀stated,฀in฀all฀material฀respects,฀based฀on฀criteria฀established฀in฀Internal฀Control฀—฀Integrated฀
Framework฀issued฀by฀the฀Committee฀of฀Sponsoring฀Organizations฀of฀the฀Treadway฀Commission฀(COSO).฀Also,฀in฀our฀opinion,฀
YUM฀maintained,฀in฀all฀material฀respects,฀effective฀internal฀control฀over฀financial฀reporting฀as฀of฀December฀25,฀2004,฀based฀
on฀criteria฀established฀in฀Internal฀Control฀—Integrated฀Framework฀issued฀by฀the฀Committee฀of฀Sponsoring฀Organizations฀of฀the฀
Treadway฀Commission฀(COSO).
We฀also฀have฀audited,฀in฀accordance฀with฀the฀standards฀of฀the฀Public฀Company฀Accounting฀Oversight฀Board฀(United฀States),฀
the฀consolidated฀balance฀sheets฀of฀YUM฀as฀of฀December฀25,฀2004฀and฀December฀27,฀2003,฀and฀the฀related฀consolidated฀state-
ments฀of฀income,฀cash฀flows,฀and฀shareholders’฀equity฀and฀comprehensive฀income฀for฀each฀of฀the฀years฀in฀the฀three-year฀period฀
ended฀December฀25,฀2004,฀and฀our฀report฀dated฀February฀28,฀2005,฀expressed฀an฀unqualified฀opinion฀on฀those฀consolidated฀
financial฀statements.
KPMG฀LLP฀
Louisville,฀KY฀
February฀28,฀2005
76