Toyota 2007 Annual Report Download - page 135

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ANNUAL REPORT 2007 133ANNUAL REPORT 2007 133
Toyota’s management is responsible for establishing and maintaining effective internal control over financial report-
ing. 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 U.S.
GAAP. Toyota’s internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect the transactions and
dispositions of Toyota’s assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with U.S. GAAP, and that Toyota’s receipts and expenditures are being made only in
accordance with authorizations of Toyota’s management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or dis-
position of Toyota’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 misstate-
ments. 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 proce-
dures may deteriorate.
Toyota’s management conducted an evaluation of the effectiveness of internal control over financial reporting
based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
Based on this evaluation, management concluded that Toyota’s internal control over financial reporting was effec-
tive as of March 31, 2007.
Management’s assessment of the effectiveness of Toyota’s internal control over financial reporting as of March 31,
2007 has been audited by PricewaterhouseCoopers Aarata, an independent registered public accounting firm, as
stated in their report which is included herein.
Management’s Annual Report on Internal Control
over Financial Reporting