Eversource 2008 Annual Report Download - page 47

REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
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 and subsidiaries (the “Company”)
as of December 31, 2008 and 2007, and the related consolidated statements of
income, comprehensive income, common shareholders’ equity, and cash flows for
each of the three years in the period ended December31, 2008. We also have
audited the Company’s internal control over financial reporting as of December
31, 2008, based on criteria established in Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Company’s management is responsible for these financial statements, for
maintaining eective internal control over financial reporting, and for its assessment
of the eectiveness of internal control over financial reporting, included in the
accompanying Company Report on Internal Controls over Financial Reporting. Our
responsibility is to express an opinion on these financial statements and an opinion on
the Company’s internal control over financial 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement and whether eective internal control
over financial reporting was maintained in all material respects. Our audits of the
financial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our audit of internal control over
financial reporting included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating eectiveness 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 financial reporting is a process designed by, or
under the supervision of, the company’s principal executive and principal financial
ocers, or persons performing similar functions, and eected by the company’s
board of directors, management, and other personnel to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance
with 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 eect on the financial statements.
Because of the inherent limitations of internal control over financial reporting,
including the possibility of collusion or improper management override of controls,
material misstatements due to error or fraud may not be prevented or detected
on a timely basis. Also, projections of any evaluation of the eectiveness of the
internal control over financial reporting to future periods are subject to the risk that
the 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 financial statements referred to above present fairly,
in all material respects, the financial position of Northeast Utilities and subsidiaries
as of December31, 2008 and 2007, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2008, in
conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, the Company maintained, in all material respects,
eective internal control over financial reporting as of December 31, 2008, based
on the criteria established in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
As discussed in Note 4, the Company adopted Financial Accounting Standards Board
Statement No. 157, Fair Value Measurements, as of January 1, 2008.
Hartford, Connecticut
February 27, 2009
46