UPS 2004 Annual Report Download - page 43

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting 41
Report of Independent Registered Public Accounting Firm on
Internal Control Over Financial Reporting
Board of Directors and Shareowners
United Parcel Service, Inc.
Atlanta, Georgia
We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial
Reporting, that United Parcel Service, Inc. and its subsidiaries (the “Company”) maintained effective internal control over financial
reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. As described in Management’s Report on Internal Control
Over Financial Reporting, management excluded from their assessment the internal control over financial reporting at Menlo
Worldwide Forwarding, Inc., which was acquired on December 20, 2004 and whose financial statements reflect total assets and rev-
enues constituting less than 3% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year
ended December 31, 2004. Accordingly, our audit did not include the internal control over financial reporting at Menlo Worldwide
Forwarding, Inc. The Company’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 manage-
ment’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 opinions.
A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal
executive and principal financial officers, or persons performing similar functions, and effected by the company’s Board of Directors,
management, and other personnel 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 con-
trol 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 assurance regarding prevention or timely detection of un-
authorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.
Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to
the risk that the 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 the Company maintained effective internal control over financial reporting as of
December 31, 2004, is fairly stated, in all material respects, based on the criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2004, based on the criteria established in
Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheet of United Parcel Service, Inc. and its subsidiaries as of December 31, 2004, and the related consolidated
statements of income, shareowners equity, and cash flows for the year ended December 31, 2004 of the Company and our report
dated March 14, 2005 expressed an unqualified opinion on those financial statements.
Atlanta, Georgia
March 14, 2005