Cardinal Health 2008 Annual Report Download - page 144

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while the transition to the new accounting software system is in process. The Company expects to maintain
certain of these additional temporary compensating controls until implementation of the new system is complete.
There were no changes in the Company’s internal control over financial reporting during the quarter ended
June 30, 2008 that have materially affected, or are reasonably likely to materially affect, its internal control over
financial reporting.
Inherent Limitations on Effectiveness of Controls
The Company’s management, including its principal executive officer and the principal financial officer,
does not expect that the Company’s disclosure controls or its internal control over financial reporting will prevent
or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control
system must reflect the fact that there are resource constraints, and the benefits of controls must be considered
relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues
and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments
in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can
also be circumvented by the individual acts of some persons, by collusion of two or more people, or by
management override of the controls. The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Projections of any evaluation of controls
effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of
changes in conditions or deterioration in the degree of compliance with policies or procedures.
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