Freeport-McMoRan 2005 Annual Report Download - page 62

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To฀the฀Board฀of฀Directors฀and฀Stockholders฀of฀
Freeport-McMoRan฀Copper฀&฀Gold฀Inc.
We฀have฀audited฀management’s฀assessment,฀included฀in฀the฀
accompanying฀Management’s฀Report฀on฀Internal฀Control฀
Over฀Financial฀Reporting,฀that฀Freeport-McMoRan฀Copper฀&฀
Gold฀Inc.฀and฀its฀subsidiaries฀maintained฀effective฀internal฀
control฀over฀financial฀reporting฀as฀of฀December฀31,฀2005,฀
based฀on฀criteria฀established฀in฀Internal฀Control-Integrated฀
Framework฀issued฀by฀the฀Committee฀of฀Sponsoring฀
Organizations฀of฀the฀Treadway฀Commission฀(COSO).฀
Freeport-McMoRan฀Copper฀&฀Gold฀Inc.’s฀management฀is฀
responsible฀for฀maintaining฀effective฀internal฀control฀over฀
financial฀reporting฀and฀for฀its฀assessment฀of฀the฀effectiveness฀
of฀internal฀control฀over฀financial฀reporting.฀Our฀
responsibility฀is฀to฀express฀an฀opinion฀on฀management’s฀
assessment฀and฀an฀opinion฀on฀the฀effectiveness฀of฀the฀
company’s฀internal฀control฀over฀financial฀reporting฀based฀on฀
our฀audit.
฀ We฀conducted฀our฀audit฀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฀effective฀
internal฀control฀over฀financial฀reporting฀was฀maintained฀in฀
all฀material฀respects.฀Our฀audit฀included฀obtaining฀an฀
understanding฀of฀internal฀control฀over฀financial฀reporting,฀
evaluating฀management’s฀assessment,฀testing฀and฀evaluating฀
the฀design฀and฀operating฀effectiveness฀of฀internal฀control,฀and฀
performing฀such฀other฀procedures฀as฀we฀considered฀necessary฀
in฀the฀circumstances.฀We฀believe฀that฀our฀audit฀provides฀a฀
reasonable฀basis฀for฀our฀opinion.
฀ A฀company’s฀internal฀control฀over฀financial฀reporting฀is฀a฀
process฀designed฀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฀
effect฀on฀the฀financial฀statements.
฀ Because฀of฀its฀inherent฀limitations,฀internal฀control฀over฀
financial฀reporting฀may฀not฀prevent฀or฀detect฀misstatements.฀
Also,฀projections฀of฀any฀evaluation฀of฀effectiveness฀to฀future฀
periods฀are฀subject฀to฀the฀risk฀that฀controls฀may฀be฀inadequate฀
because฀of฀changes฀in฀conditions,฀or฀that฀the฀degree฀of฀
compliance฀with฀the฀policies฀or฀procedures฀may฀deteriorate.
฀ In฀our฀opinion,฀management’s฀assessment฀that฀Freeport-
McMoRan฀Copper฀&฀Gold฀Inc.฀and฀its฀subsidiaries฀maintained฀
effective฀internal฀control฀over฀financial฀reporting฀as฀of฀
December฀31,฀2005,฀is฀fairly฀stated,฀in฀all฀material฀respects,฀
based฀on฀the฀COSO฀criteria.฀Also,฀in฀our฀opinion,฀฀
Freeport-McMoRan฀Copper฀&฀Gold฀Inc.฀and฀its฀subsidiaries฀
maintained,฀in฀all฀material฀respects,฀effective฀internal฀
control฀over฀financial฀reporting฀as฀of฀December฀31,฀2005,฀
based฀on฀the฀COSO฀criteria.
฀ We฀have฀also฀audited,฀in฀accordance฀with฀the฀standards฀of฀
the฀Public฀Company฀Accounting฀Oversight฀Board฀(United฀
States),฀the฀consolidated฀balance฀sheets฀of฀Freeport-McMoRan฀
Copper฀&฀Gold฀Inc.฀and฀its฀subsidiaries฀as฀of฀December฀31,฀
2005฀and฀2004,฀and฀the฀related฀statements฀of฀income,฀cash฀
flows฀and฀stockholders’฀equity฀for฀each฀of฀the฀three฀years฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀
in฀the฀period฀ended฀December฀31,฀2005฀and฀our฀report฀dated฀
February฀24,฀2006฀expressed฀an฀unqualified฀opinion฀thereon.
Ernst฀&฀Young฀LLP
New฀Orleans,฀Louisiana
February฀24,฀2006
Report of Independent Registered Public Accounting Firm
฀59฀|฀2005฀ANNUAL฀REPORT฀฀฀FINANCIAL฀&฀OPERATING฀INFORMATION