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Chevron Corporation 2008 Annual Report 57Chevron Corporation 2008 Annual Report 57
Report of Independent Registered Public Accounting Firm
testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered
necessary in the circumstances. We believe that our audits pro-
vide a reasonable basis for our opinions.
As discussed in Note 14 to the Consolidated Financial
Statements, the Company changed its method of accounting
for buy/sell contracts on April 1, 2006.
As discussed in Note 16 to the Consolidated Financial
Statements, the Company changed its method of accounting
for uncertain income tax positions on January 1, 2007.
A company’s internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of finan-
cial statements for external purposes in accordance with
generally accepted accounting principles. A company’s inter-
nal 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 transac-
tions 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 generally accepted accounting principles, 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 assur-
ance 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 inad-
equate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
San Francisco, California
February 26, 2009
To the Stockholders and the Board of Directors of Chevron Corporation:
In our opinion, the accompanying consolidated balance sheets
and the related consolidated statements of income, comprehensive
income, stockholders’ equity and cash flows present fairly, in all
material respects, the financial position of Chevron Corporation
and its subsidiaries at December 31, 2008, and December 31,
2007, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2008,
in conformity with accounting principles generally accepted in
the United States of America. In addition, in our opinion, the
financial statement schedule listed in the index appearing under
Item 15(a)(2) presents fairly, in all material respects, the infor-
mation set forth therein when read in conjunction with the
related consolidated financial statements. Also in our opinion,
the Company maintained, in all material respects, effective inter-
nal control over financial reporting as of December 31, 2008,
based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organiza-
tions of the Treadway Commission (COSO). The Company’s
management is responsible for these financial statements and
financial statement schedule, for maintaining effective internal
control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting,
included in the accompanying Management’s Report on Inter-
nal Control Over Financial Reporting. Our responsibility is to
express opinions on these financial statements, on the financial
statement schedule, and on the Company’s internal control over
financial reporting based on our integrated audits. We con-
ducted 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 audits to obtain
reasonable assurance about whether the financial statements are
free of material misstatement and whether effective internal
control over financial reporting was maintained in all material
respects. Our audits of the financial statements included exam-
ining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. Our
audit of internal control over financial reporting included
obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and