Pizza Hut 2006 Annual Report Download - page 46

51
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
YUM! Brands, Inc.:
We have audited management’s assessment, included in the accompanying Management’s Report on Internal
Control over Financial Reporting appearing on page 53 of the Company’s Annual Report, for the fiscal year ended
December 30, 2006, that YUM! Brands, Inc. and Subsidiaries (“YUM”) maintained effective internal control
over financial reporting as of December 30, 2006, 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 assess-
ment 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 finan-
cial 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 assur-
ance 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 manage-
ment’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 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 state-
ments 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.
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 30, 2006, 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 30, 2006, 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 30, 2006 and December 31, 2005,
and the related consolidated statements of income, cash flows and shareholders’ equity and comprehen-
sive income for each of the years in the three-year period ended December 30, 2006, and our report dated
February 28, 2007, expressed an unqualified opinion on those consolidated financial statements.
KPMG LLP
Louisville, Kentucky
February 28, 2007