Eversource 2001 Annual Report Download - page 28

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Company Report Report of Independent Public
Accountants
The accompanying consolidated financial statements of North-
east 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
accordance with accounting principles generally accepted in the
United States using estimates and judgments, 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 con-
duct in all of its business activities. The company maintains a sys-
tem 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 reli-
able, 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 communi-
cates to its management employees their internal control responsi-
bilities and policies prohibiting conflicts of interest.
The Audit Committee of the Board of Trustees is composed
entirely of independent trustees. The Audit Committee meets
periodically with management, the internal auditors and the inde-
pendent 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 con-
trols, 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 unauthorized use and
that its financial records, which are the basis for the preparation of
all financial statements, are reliable.
T o the Board of Trustees and
Shareholders of Northeast Utilities:
We have audited the accompanying consolidated balance sheets
and consolidated statements of capitalization of Northeast Utili-
ties (a Massachusetts trust) and subsidiaries as of December 31,
2001 and 2000, 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, 2001. 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 auditing stan-
dards generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of mate-
rial 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 princi-
ples 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 pre-
sent fairly, in all material respects, the financial position of North-
east Utilities and subsidiaries as of December 31, 2001 and 2000,
and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2001, in con-
formity with accounting principles generally accepted in the Unit-
ed States.
As discussed in Note 1C to the consolidated financial state-
ments, effective January 1, 2001, the company adopted Statement
of Financial Accounting Standards No. 133, “Accounting for
Derivative Instruments and Hedging Activities,” as amended.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 22, 2002
26
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