Progress Energy 2007 Annual Report Download - page 67

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
It is the responsibility of Progress Energy’s management to establish and maintain adequate internal control over
financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934,
as amended. Progress Energy’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 accounting principles generally accepted in the United States of America. Internal
control over financial reporting includes 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 Progress Energy;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally accepted in the United States of America; (3) provide
reasonable assurance that receipts and expenditures of Progress Energy are being made only in accordance with
authorizations of management and directors of Progress Energy; and (4) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of Progress Energy’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.
Management assessed the effectiveness of Progress Energy’s internal control over financial reporting at December 31,
2007. Management based this assessment 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. Management’s assessment included an evaluation of the design of Progress Energy’s internal control
over financial reporting and testing of the operational effectiveness of its internal control over financial reporting.
Management reviewed the results of its assessment with the Audit Committee of the board of directors.
Based on our assessment, management determined that, at December 31, 2007, Progress Energy maintained effective
internal control over financial reporting.
Deloitte & Touche LLP, an independent registered public accounting firm, has audited the internal control over financial
reporting of Progress Energy as of December 31, 2007, as stated in their report.
William D. Johnson
Chairman, President and Chief Executive Officer
Peter M. Scott III
Executive Vice President and Chief Financial Officer
February 28, 2008
Progress Energy Annual Report 2007
65
R E P O R T S O F M A N A G E M E N T A N D I N D E P E N D E N T
REGISTERED PUBLIC ACCOUNTING FIRM