Walgreens 2006 Annual Report Download - page 34

Jeffrey A. Rein
President and Chief Executive Officer
To the Board of Directors and Shareholders of Walgreen Co.:
We have audited the accompanying consolidated balance sheets of Walgreen Co.
and Subsidiaries (the “Company”) as of August 31, 2006 and 2005, and the
related consolidated statements of earnings, shareholders’ equity, and cash
flows for each of the three years in the period ended August 31, 2006. These
financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits 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 the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material
respects, the financial position of Walgreen Co. and Subsidiaries as of August
31, 2006 and 2005, and the results of their operations and their cash flows
for each of the three years in the period ended August 31, 2006, in conformity
with accounting principles generally accepted in the United States of America.
As discussed in “Summary of Major Accounting Policies” in the consolidated
financial statements, effective September 1, 2005, the Company changed its
method of accounting for share-based payments to adopt Statement of Financial
Accounting Standards No. 123(R),
Share-Based Payment.
We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of the Company’s
internal control over financial reporting as of August 31, 2006, based on the
criteria established in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our
report dated October 31, 2006 expressed an unqualified opinion on manage-
ment’s assessment of the effectiveness of the Company’s internal control over
financial reporting and an unqualified opinion on the effectiveness of the
Company’s internal control over financial reporting.
DELOITTE & TOUCHE LLP
Chicago, Illinois
October 31, 2006
Management’s Report
on Internal Control
Report of Independent Registered
Public Accounting Firm
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rule 13a-
15(f). Under the supervision and with the participation of our management, includ-
ing our principal executive officer and principal financial officer, we conducted an
evaluation of the effectiveness of our 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 (COSO).
Based on our evaluation, management concluded that our internal control over
financial reporting was effective as of August 31, 2006. Our management’s
assessment of the effectiveness of our internal control over financial reporting as
of August 31, 2006, has been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in its report which is included herein.
William M. Rudolphsen
Senior Vice President
and Chief Financial Officer
Page 32 2006 Walgreens Annual Report