Aetna 2006 Annual Report Download - page 91

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Page 89
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for
the Company. Internal control over financial reporting is defined as 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 U.S. generally accepted accounting principles (“GAAP”).
Our internal control over financial reporting process 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
our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
consolidated financial statements in accordance with GAAP, and that receipts and expenditures are being made
only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or dispositions of our assets that could
have a material effect on our consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Further, 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 policies or
procedures may deteriorate.
Under the supervision and with the participation of management, including our Chief Executive and Chief
Financial Officers, management assessed the effectiveness of our system of internal control over financial reporting
at December 31, 2006. In making this assessment, management used the framework set forth by the Committee of
Sponsoring Organizations of the Treadway Commission in “Internal Control – Integrated Framework.” Based on
this assessment, management concluded that our system of internal control over financial reporting was effective at
December 31, 2006. Management’ s assessment of the effectiveness of our system of internal control over financial
reporting has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their
attestation report which is included herein. KPMG LLP has also audited our consolidated financial statements,
which report is also included herein.
Management’s Responsibility for Financial Statements
Management is responsible for our consolidated financial statements, which have been prepared in accordance with
GAAP. Management believes the consolidated financial statements, and other financial information included in
this report, fairly present in all material respects our financial position, results of operations and cash flows as of
and for the periods presented in this report.
The financial statements are the product of a number of processes that include the gathering of financial data
developed from the records of our day-to-day business transactions. Informed judgments and estimates are used for
those transactions not yet complete or for which the ultimate effects cannot be measured precisely. We emphasize
the selection and training of personnel who are qualified to perform these functions. In addition, our personnel are
subject to rigorous standards of ethical conduct that are widely communicated throughout the organization.
Our Audit Committee engages KPMG LLP, an independent registered public accounting firm, to audit our
consolidated financial statements and express their opinion thereon. Members of that firm also have the right of
full access to each member of management in conducting their audits. The report of KPMG LLP on their audit of
our consolidated financial statements appears below.
Audit Committee Oversight
Our Audit Committee is comprised solely of independent directors. The Audit Committee meets regularly with
management, the internal auditors and KPMG LLP to oversee and monitor the work of each and to inquire of each
as to their assessment of the performance of the others in their work relating to our consolidated financial
statements and internal control over financial reporting. Both KPMG LLP and our internal auditors have, at all
times, the right of full access to the Audit Committee, without management present, to discuss any matter they
believe should be brought to the attention of the Audit Committee.