Freddie Mac 2015 Annual Report Download - page 207

Financial Statements Report of Independent Registered Public Accounting Firm
Freddie Mac 2015 Form 10-K 205
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors and Stockholders of Freddie Mac
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of
comprehensive income, of equity, and of cash flows present fairly, in all material respects, the financial
position of Freddie Mac, a stockholder-owned government sponsored enterprise, and its subsidiaries (the
"Company") at December 31, 2015 and 2014, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2015 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in
all material respects, effective internal control over financial reporting as of December 31, 2015, based on
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) because a material weakness in internal
control over financial reporting related to disclosure controls and procedures that do not provide adequate
mechanisms for information known to the Federal Housing Finance Agency (“FHFA”) that may have
financial statement disclosure ramifications to be communicated to management of Freddie Mac existed
as of that date. A material weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a material misstatement of the
annual or interim financial statements will not be prevented or detected on a timely basis. The material
weakness referred to above is described in Management’s Report on Internal Control Over Financial
Reporting, appearing under "Controls and Procedures." We considered this material weakness in
determining the nature, timing, and extent of audit tests applied in our audit of the 2015 consolidated
financial statements, and our opinion regarding the effectiveness of the Company’s internal control over
financial reporting does not affect our opinion on those consolidated financial statements. The
Company’s management is responsible for these financial statements, for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting included in management’s report referred to above. Our responsibility is to express opinions on
these financial statements and on the Company’s internal control over financial reporting based on our
integrated 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
audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement and whether effective 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 effectiveness 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.
As discussed in “Note 2: Conservatorship and Related Matters”, in September 2008, the Company was
placed into conservatorship by the FHFA. The U.S. Department of Treasury (“Treasury”) has committed
financial support to the Company and management continues to conduct business operations pursuant to