Emerson 2008 Annual Report Download - page 58

A Powerful Force for Innovation [ 51 ]
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The Board of Directors and Stockholders
Emerson Electric Co.:
We have audited the accompanying consolidated balance sheets of Emerson Electric Co. and subsidiaries as of
September 30, 2008 and 2007, and the related consolidated statements of earnings, stockholders’ equity, and cash
ows for each of the years in the three-year period ended September 30, 2008. We also have audited Emerson Electric
Co.’s internal control over nancial reporting as of September 30, 2008, based on the criteria established in Internal
Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Emerson Electric Co.’s management is responsible for these consolidated nancial statements, for maintaining
effective internal control over nancial reporting, and for its assessment of the effectiveness of internal control over
nancial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on these consolidated nancial statements and an opinion on the Company’s
internal control over nancial reporting based on our audits.
We conducted 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 nancial statements are free of material misstatement and whether effective internal control over nan-
cial reporting was maintained in all material respects. Our audits of the consolidated nancial statements included
examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements, assessing the
accounting principles used and signicant estimates made by management, and evaluating the overall nancial
statement presentation. Our audit of internal control over nancial reporting included obtaining an understanding
of internal control over nancial reporting, assessing the risk that a material weakness exists, and testing and evalu-
ating 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 provide
a reasonable basis for our opinions.
A company’s internal control over nancial reporting is a process designed to provide reasonable assurance regarding
the reliability of nancial reporting and the preparation of nancial statements for external purposes in accordance
with U.S. generally accepted accounting principles. A company’s internal control over nancial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly re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 nancial statements in accordance with U.S. 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 reasonable 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 nancial statements.
Because of its inherent limitations, internal control over nancial 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
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
In our opinion, the consolidated nancial statements referred to above present fairly, in all material respects, the
nancial position of Emerson Electric Co. and subsidiaries as of September 30, 2008 and 2007, and the results of
their operations and their cash ows for each of the years in the three-year period ended September 30, 2008, in
conformity with U.S. generally accepted accounting principles. Also in our opinion, Emerson Electric Co. maintained,
in all material respects, effective internal control over nancial reporting as of September 30, 2008, based on criteria
established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
As discussed in note 1 to the consolidated nancial statements, effective September 30, 2007, the Company has
changed its method of accounting for dened benet pension and other postretirement plans due to the adopted
provisions of Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Dened Benet Pension
and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R).
St. Louis, Missouri
November 24, 2008