Eversource 1999 Annual Report Download - page 32

The accompanying consolidated financial statements of Northeast
Utilities and subsidiaries and other sections of this annual report
were prepared by the company. These financial statements, which
were audited by Arthur Andersen LLP, were prepared in accor-
dance with generally accepted accounting principles using estimates
and judgment, where required, and giving consideration to
materiality.
The company has endeavored to establish a control environ-
ment that encourages the maintenance of high standards of
conduct in all of its business activities. The company maintains
a system of internal controls over financial reporting which is
designed to provide reasonable assurance to the company’s man-
agement and Board of Trustees regarding the preparation of
reliable, published financial statements. The system is supported
by an organization of trained management personnel, policies
and procedures, and a comprehensive program of internal audits.
Through established programs, the company regularly commu-
nicates to its management employees their internal control
responsibilities and policies prohibiting conflicts of interest.
The Audit Committee of the Board of Trustees is composed
entirely of outside trustees. The Audit Committee meets periodi-
cally with management, the internal auditors and the independent
auditors to review the activities of each and to discuss audit
matters, financial reporting and the adequacy of internal controls.
Because of inherent limitations in any system of internal
controls, errors or irregularities may occur and not be detected.
The company believes, however, that its system of internal
accounting controls and control environment provide reasonable
assurance that its assets are safeguarded from loss or unauthor-
ized use and that its financial records, which are the basis for
the preparation of all financial statements, are reliable.
30
COMPANY REPORT REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS
To the Board of Trustees and
Shareholders of Northeast Utilities:
We have audited the accompanying consolidated balance sheets
and consolidated statements of capitalization of Northeast
Utilities (a Massachusetts trust) and subsidiaries as of December
31, 1999 and 1998, and the related consolidated statements of
income, comprehensive income, shareholders’ equity, cash flows
and income taxes for each of the three years in the period ended
December 31, 1999. These financial statements are the responsi-
bility of the company’s management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. 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, the financial statements referred to above
present fairly, in all material respects, the financial position of
Northeast Utilities and subsidiaries as of December 31, 1999
and 1998, and the results of their operations and their cash
flows for each of the three years in the period ended December
31, 1999, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 25, 2000