Eli Lilly 2006 Annual Report Download - page 57

FINANCIALS
55
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Eli Lilly and Company
We have audited management’s assessment, included in the accompanying Management’s Report on Internal
Control Over Financial Reporting, that Eli Lilly and Company and subsidiaries maintained effective internal control
over fi nancial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO crite-
ria). Eli Lilly and Company and subsidiaries’ management is responsible for maintaining effective internal control
over fi nancial reporting and for its assessment of the effectiveness of internal control over fi nancial reporting. Our
responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the
company’s internal control over fi nancial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over fi nancial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over fi nancial reporting, evaluating management’s assess-
ment, testing and evaluating the design and operating effectiveness of internal control, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.
A company’s internal control over fi nancial reporting is a process designed to provide reasonable assurance
regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over fi nancial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly refl ect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of fi nancial statements in accor-
dance 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 (3) provide rea-
sonable 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 fi nancial statements.
Because of its inherent limitations, internal control over fi nancial reporting may not prevent or detect mis-
statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that con-
trols may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
In our opinion, management’s assessment that Eli Lilly and Company and subsidiaries maintained effective
internal control over fi nancial reporting as of December 31, 2006, is fairly stated, in all material respects, based on
the COSO criteria. Also, in our opinion, Eli Lilly and Company and subsidiaries maintained, in all material respects,
effective internal control over fi nancial reporting as of December 31, 2006, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the 2006 consolidated fi nancial statements of Eli Lilly and Company and subsidiaries and our re-
port dated February 9, 2007, expressed an unqualifi ed opinion thereon.
Indianapolis, Indiana
February 9, 2007