Emerson 2005 Annual Report Download - page 28

1 6 E M E R S O N 2 0 0 5
Financial Review
REPORT OF MANAGEMENT
The Company’s management is responsible for the integrity and accuracy of the financial statements.
Management believes that the financial statements for the three years ended September 30, 2005,
have been prepared in conformity with U.S. generally accepted accounting principles appropriate in the
circumstances. In preparing the financial statements, management makes informed judgments and
estimates where necessary to reflect the expected effects of events and transactions that have not been
completed. The Company’s disclosure controls and procedures ensure that material information required to
be disclosed is recorded, processed, summarized and communicated to management and reported within
the required time periods.
In meeting its responsibility for the reliability of the financial statements, management relies on a system
of internal accounting control. This system is designed to provide reasonable assurance that assets are
safeguarded and transactions are executed in accordance with management’s authorization and recorded
properly to permit the preparation of financial statements in accordance with U.S. generally accepted
accounting principles. The design of this system recognizes that errors or irregularities may occur and that
estimates and judgments are required to assess the relative cost and expected benefits of the controls.
Management believes that the Company’s accounting controls provide reasonable assurance that errors or
irregularities that could be material to the financial statements are prevented or would be detected within a
timely period.
The Audit Committee of the Board of Directors, which is composed solely of independent Directors,
is responsible for overseeing the Company’s financial reporting process. The Audit Committee meets
with management and the internal auditors periodically to review the work of each and to monitor the
discharge by each of its responsibilities. The Audit Committee also meets periodically with the independent
auditors who have free access to the Audit Committee and the Board of Directors to discuss the quality and
acceptability of the Company’s financial reporting, internal controls, as well as non-audit-related services.
The independent auditors are engaged to express an opinion on the Company’s consolidated financial
statements and on the Company’s internal control over financial reporting. Their opinions are based on
procedures which they believe to be sufficient to provide reasonable assurance that the financial statements
contain no material errors and that the Company’s internal controls are effective.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
The Company’s management is responsible for establishing and maintaining adequate internal control
over financial reporting for the Company. With the participation of the Chief Executive Officer and the
Chief Financial Officer, management conducted an evaluation of the effectiveness of internal control over
financial reporting based on the framework and the criteria established in Internal Control – Integrated
Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on
this evaluation, management has concluded that internal control over financial reporting was effective as of
September 30, 2005.
The Company’s independent auditor, KPMG LLP, a registered public accounting firm, has issued an audit
report on management’s assessment of internal control over financial reporting.
David N. Farr Walter J. Galvin
Chairman of the Board, Senior Executive Vice President
Chief Executive Officer, and and Chief Financial Officer
President