Travelers 2013 Annual Report Download - page 271

Management’s Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting. The Company’s internal control over financial reporting is designed to
provide reasonable assurances regarding the reliability of financial reporting and the preparation of the
consolidated financial statements of the Company in accordance with U.S. generally accepted
accounting principles. The Company’s accounting policies and internal controls over financial reporting,
established and maintained by management, are under the general oversight of the Company’s Audit
Committee.
The Company’s internal control over financial reporting includes those policies and procedures
that:
• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with U.S. generally accepted accounting principles, and
that receipts and expenditures are being made only in accordance with authorizations of the
Company’s management and directors; and
• provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of 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 has assessed the Company’s internal control over financial reporting as of
December 31, 2013. The standard measures adopted by management in making its evaluation are the
measures in the Internal Control—Integrated Framework (1992) published by the Committee of
Sponsoring Organizations of the Treadway Commission.
Consistent with guidance issued by the Securities and Exchange Commission that an assessment of
a recently acquired business may be omitted from management’s report on internal control over
financial reporting in the year of acquisition, management excluded an assessment of the effectiveness
of the Company’s internal control over financial reporting related to Dominion. The Company acquired
all of the issued and outstanding shares of Dominion on November 1, 2013. Dominion represented less
than 4% of the Company’s consolidated total assets and less than 1% of each of the Company’s
consolidated total revenues and net income as of and for the year ended December 31, 2013.
Based upon its assessment, management has concluded that the Company’s internal control over
financial reporting was effective at December 31, 2013, and that there were no material weaknesses in
the Company’s internal control over financial reporting as of that date.
KPMG LLP, an independent registered public accounting firm, which has audited and reported on
the consolidated financial statements contained in this Form 10-K, has issued its report on the
effectiveness of the Company’s internal control over financial reporting which follows this report.
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