Dominion Power 2007 Annual Report Download - page 62

Management’s Annual Report on Internal Control Over Financial Reporting
Management of Dominion Resources, Inc. (Dominion) under-
stands and accepts responsibility for our financial statements and
related disclosures and the effectiveness of internal control over
financial reporting (internal control). We continuously strive to
identify opportunities to enhance the effectiveness and efficiency
of internal control, just as we do throughout all aspects of our
business.
We maintain a system of internal control designed to provide
reasonable assurance, at a reasonable cost, that our assets are safe-
guarded against loss from unauthorized use or disposition and
that transactions are executed and recorded in accordance with
established procedures. This system includes written policies, an
organizational structure designed to ensure appropriate segrega-
tion of responsibilities, careful selection and training of qualified
personnel and internal audits.
The Audit Committee of the Board of Directors of Domin-
ion, composed entirely of independent directors, meets periodi-
cally with the independent registered public accounting firm, the
internal auditors and management to discuss auditing, internal
control, and financial reporting matters of Dominion and to
ensure that each is properly discharging its responsibilities. Both
the independent registered public accounting firm and the
internal auditors periodically meet alone with the Audit Commit-
tee and have free access to the Committee at any time.
SEC rules implementing Section 404 of the Sarbanes-Oxley
Act of 2002 require our 2007 Annual Report to contain a
management’s report and a report of the independent registered
public accounting firm regarding the effectiveness of internal
control. As a basis for our report, we tested and evaluated the
design and operating effectiveness of internal controls. Based on
our assessment as of December 31, 2007, we make the following
assertion:
Management is responsible for establishing and maintaining
effective internal control over financial reporting of Dominion.
There are inherent limitations in the effectiveness of any
internal control, including the possibility of human error and the
circumvention or overriding of controls. Accordingly, even effec-
tive internal controls can provide only reasonable assurance with
respect to financial statement preparation. Further, because of
changes in conditions, the effectiveness of internal control may
vary over time.
We evaluated Dominion’s internal control over financial
reporting as of December 31, 2007. This assessment was based on
criteria for effective internal control over financial reporting
described in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Com-
mission. Based on this assessment, we believe that Dominion
maintained effective internal control over financial reporting as of
December 31, 2007.
Our independent registered public accounting firm is engaged
to express an opinion on our internal control over financial
reporting, as stated in their report which is included herein.
February 26, 2008
60 Dominion 2007 Annual Report