John Deere 2014 Annual Report Download - page 29

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
The management of Deere & Company is responsible for
establishing and maintaining adequate internal control over
financial reporting. Deere & Company’s internal control system
was designed to provide reasonable assurance regarding the
preparation and fair presentation of published financial statements
in accordance with generally accepted accounting principles.
All internal control systems, no matter how well designed,
have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance
with respect to financial statement preparation and presentation
in accordance with generally accepted accounting principles.
Management assessed the effectiveness of the company’s
internal control over financial reporting as of October 31, 2014,
using the criteria set forth in Internal Control – Integrated
Framework (1992) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on that
assessment, management believes that, as of October 31, 2014,
the company’s internal control over financial reporting was
effective.
The company’s independent registered public accounting
firm has issued an audit report on the effectiveness of the
company’s internal control over financial reporting. This report
appears below.
December 19, 2014
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Deere & Company:
We have audited the accompanying consolidated balance sheets
of Deere & Company and subsidiaries (the “Company”) as of
October 31, 2014 and 2013, and the related statements of
consolidated income, comprehensive income, changes in
consolidated stockholders’ equity, and consolidated cash flows
for each of the three years in the period ended October 31,
2014. We also have audited the Company’s internal control
over financial reporting as of October 31, 2014, based on
criteria established in Internal Control - Integrated Framework
(1992) issued by the Committee of Sponsoring Organizations
of the Treadway Commission. 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 the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsi-
bility 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 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 state-
ments, 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.
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 officers, or persons
performing similar functions, and effected 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 expendi-
tures 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 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 effectiveness 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 the Company as of October 31, 2014 and
2013, and the results of their operations and their cash flows for
each of the three years in the period ended October 31, 2014,
in conformity with accounting principles generally accepted in
the United States of America. Also in our opinion, the Company
maintained, in all material respects, effective internal control
over financial reporting as of October 31, 2014, based on the
criteria established in Internal Control – Integrated Framework
(1992) issued by the Committee of Sponsoring Organizations of
the Treadway Commission.
Deloitte & Touche LLP
Chicago, Illinois
December 19, 2014
29