Freddie Mac 2006 Annual Report Download - page 107

REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of Freddie Mac:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of
cash Öows, and of stockholders' equity present fairly, in all material respects, the Ñnancial position of Freddie Mac, a
stockholder-owned government-sponsored enterprise (the ""company''), and its subsidiaries at December 31, 2006 and 2005,
and the results of their operations and their cash Öows 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. These Ñnancial statements are
the responsibility of the company's management. Our responsibility is to express an opinion on these Ñnancial statements
based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the Ñnancial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Ñnancial statements, assessing the accounting principles used and
signiÑcant estimates made by management, and evaluating the overall Ñnancial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
We have also audited in accordance with auditing standards generally accepted in the United States of America the
supplemental consolidated fair value balance sheets of the company as of December 31, 2006 and 2005. As described in
""NOTE 16: FAIR VALUE DISCLOSURES,'' the supplemental consolidated fair value balance sheets have been prepared
by management to present relevant Ñnancial information that is not provided by the historical-cost consolidated balance
sheets and is not intended to be a presentation in conformity with generally accepted accounting principles. In addition, the
supplemental consolidated fair value balance sheets do not purport to present the net realizable, liquidation, or market value
of the company as a whole. Furthermore, amounts ultimately realized by the company from the disposal of assets or amounts
required to settle obligations may vary signiÑcantly from the fair values presented. In our opinion, the supplemental
consolidated fair value balance sheets referred to above present fairly, in all material respects, the information set forth
therein as described in ""NOTE 16: FAIR VALUE DISCLOSURES.''
As discussed in ""NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,'' the company changed
its method of accounting for deÑned beneÑt plans as of December 31, 2006, its method of accounting for interest expense
related to callable debt instruments as of January 1, 2005, and its method for determining gains and losses on sales of
certain guaranteed securities as of October 1, 2005.
McLean, Virginia
March 20, 2007
95 Freddie Mac