Cardinal Health 2009 Annual Report Download - page 136

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Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control system is
designed to provide reasonable assurance regarding the preparation and fair presentation of published financial
statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance
with respect to financial statement preparation and presentation. 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 compliance with the policies or procedures may deteriorate or be circumvented.
Management assessed the effectiveness of the Company’s internal control over financial reporting as
of June 30, 2009. In making this assessment, management used the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (the “COSO criteria”). Based on management’s assessment and the COSO criteria, management
believes that the Company’s internal control over financial reporting was effective as of June 30, 2009 to provide
reasonable assurance regarding the preparation and fair presentation of its published financial statements.
The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued a report on
the Company’s internal control over financial reporting. Ernst & Young LLP’s report appears below under this
Item 9A and expresses unqualified opinions on the effectiveness of the Company’s internal control over financial
reporting.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ended
June 30, 2009 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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