Entergy 2006 Annual Report Download - page 64

ENTERGY CORPORATION AND SUBSIDIARIES 2
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REPORTof MANAGEMENT
Management of Entergy Corporation and its subsidiaries has prepared
and is responsible for the financial statements and related financial
information included in this document. To meet this responsibility,
management establishes and maintains a system of internal controls
designed to provide reasonable assurance regarding the preparation and
fair presentation of financial statements in accordance with generally
accepted accounting principles. This system includes communication
through written policies and procedures, an employee Code of
Entegrity, and an organizational structure that provides for appropriate
division of responsibility and training of personnel. This system is also
tested by a comprehensive internal audit program.
Entergy management assesses the effectiveness of Entergy’s internal
control over financial reporting on an annual basis. In making this
assessment, management uses the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control - Integrated Framework. Management acknowledges,
however, that all internal control systems, no matter how well designed,
have inherent limitations and can provide only reasonable assurance
with respect to financial statement preparation and presentation.
Entergy Corporation and its subsidiaries’ independent registered
public accounting firm, Deloitte & Touche LLP, has issued an attesta-
tion report on Entergy management’s assessment of the effectiveness of
Entergy’s internal control over financial reporting as of December 31,
2006, which is included herein on page 49.
In addition, the Audit Committee of the Board of Directors, com-
posed solely of independent Directors, meets with the independent
auditors, internal auditors, management, and internal accountants
periodically to discuss internal controls, and auditing and financial
reporting matters. The Audit Committee appoints the independent
auditors annually, seeks shareholder ratification of the appointment,
and reviews with the independent auditors the scope and results of the
audit effort. The Audit Committee also meets periodically with the
independent auditors and the chief internal auditor without manage-
ment present, providing free access to the Audit Committee.
Based on management’s assessment of internal controls using the
COSO criteria, management believes that Entergy maintained effective
internal control over financial reporting as of December 31, 2006.
Management further believes that this assessment, combined with the
policies and procedures noted above, provides reasonable assurance that
Entergy’s financial statements are fairly and accurately presented in
accordance with generally accepted accounting principles.
J. WAYNE LEONARD LEO P. DENAULT
Chairman and Executive Vice President
Chief Executive Officer and Chief Financial Officer
REPORTof INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Entergy Corporation:
We have audited the accompanying consolidated balance sheets of
Entergy Corporation and Subsidiaries (the “Corporation”) as
of December 31, 2006 and 2005, and the related consolidated
statements of income; of retained earnings, comprehensive income, and
paid-in capital; and of cash flows for each of the three years in the period
ended December 31, 2006. These financial statements are the
responsibility of the Corporation’s management. Our responsibility is to
express an opinion on these financial statements 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 audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of Entergy Corporation
and Subsidiaries as of December 31, 2006 and 2005, and the results of
their operations and their cash flows for each of the three years in the
period ended December 31, 2006, in conformity with accounting
principles generally accepted in the United States of America.
As discussed in Note 11 to the consolidated financial statements, in
2006 the Corporation adopted the provisions of Statement of Financial
Accounting Standards No. 158, Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans - an amendment of
FASB Statements No. 87, 88, 106, and 132(R).
We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the effectiveness
of the Corporation’s internal control over financial reporting as of
December 31, 2006, based on the criteria established in Internal
Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated
February 26, 2007 expressed an unqualified opinion on management’s
assessment of the effectiveness of the Corporation’s internal control over
financial reporting and an unqualified opinion on the effectiveness of the
Corporation’s internal control over financial reporting.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
February 26, 2007
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ENTERGY CORPORATION AND SUBSIDIARIES 2
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