Alcoa 2014 Annual Report Download - page 109

Item 8. Financial Statements and Supplementary Data.
Management’s Reports to Alcoa Shareholders
Management’s Report on Financial Statements and Practices
The accompanying Consolidated Financial Statements of Alcoa Inc. and its subsidiaries (the “Company”) were prepared by
management, which is responsible for their integrity and objectivity. The statements were prepared in accordance with accounting
principles generally accepted in the United States of America and include amounts that are based on management’s best judgments
and estimates. The other financial information included in the annual report is consistent with that in the financial statements.
Management also recognizes its responsibility for conducting the Company’s affairs according to the highest standards of personal
and corporate conduct. This responsibility is characterized and reflected in key policy statements issued from time to time regarding,
among other things, conduct of its business activities within the laws of the host countries in which the Company operates and
potentially conflicting outside business interests of its employees. The Company maintains a systematic program to assess
compliance with these policies.
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. In
order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act,
management has conducted an assessment, including testing, using the criteria in Internal Control—Integrated Framework (2013),
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s system of internal
control over financial reporting is designed 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. The
Company’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 the assets of the Company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the
Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’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 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.
Based on the assessment, management has concluded that the Company maintained effective internal control over financial reporting
as of December 31, 2014, based on criteria in Internal Control—Integrated Framework (2013) issued by the COSO.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2014 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein.
Firth Rixson has been excluded from management’s assessment of internal control over financial reporting as of December 31, 2014,
as it was acquired by the Company in a purchase business combination in November 2014. Firth Rixson is a 100% owned subsidiary
whose total assets (excluding goodwill and intangible assets) and total sales represent 4% and less than 1%, respectively, of the
related consolidated financial statement amounts of the Company as of and for the year ended December 31, 2014.
Klaus Kleinfeld
Chairman and
Chief Executive Officer
William F. Oplinger
Executive Vice President and
Chief Financial Officer
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