Johnson and Johnson 2008 Annual Report Download - page 71

JOHNSON & JOHNSON 2008 ANNUAL REPORT 69
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Johnson & Johnson:
In our opinion, the accompanying consolidated balance sheets and
the related consolidated statements of earnings, statements of
equity, and statements of cash flows present fairly, in all material
respects, the financial position of Johnson & Johnson and its sub-
sidiaries (“the Company”) at December 28, 2008 and December
30, 2007, and the results of their operations and their cash flows
for each of the three years in the period ended December 28, 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, effective internal control over
financial reporting as of December 28, 2008, based on criteria
established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commis-
sion (COSO). 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 accompany-
ing, “Management’s Report on Internal Control over Financial
Reporting.” Our responsibility is to express opinions on these finan-
cial 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 arefree of material misstatement
and whether effectiveinternal control over financial reporting was
maintained in all material respects. Our audits of the financial state-
ments 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 effec-
tiveness 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
areasonable basis for our opinions.
Acompany’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
(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that trans-
actions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting prin-
ciples, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisi-
tion, use, or disposition of the company’sassets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over finan-
cial reporting may not prevent or detect misstatements. Also, pro-
jections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
New York, New York
February 17, 2009
Management’s Report on Internal Control Over Financial Reporting
Under Section 404 of the Sarbanes-Oxley Act of 2002, manage-
ment is required to assess the effectiveness of the Company’s inter-
nal control over financial reporting as of the end of each fiscal year
and report, based on that assessment, whether the Company’s
internal control over financial reporting is effective.
Management of the Company is responsible for establishing
and maintaining adequateinternal control over financial reporting.
The Company’s internal control over financial reporting is designed
toprovide reasonable assurance as to the reliability of the Company’s
financial reporting and the preparation of external financial state-
ments in accordance with generally accepted accounting principles.
Internal controls over financial reporting, no matter how well
designed, have inherent limitations. Therefore, internal control over
financial reporting determined to be effective can provide only
reasonable assurance with respect to financial statement prepara-
tion and maynot prevent or detect all misstatements. Moreover,
projections of any evaluation of effectiveness to future periods are
subject tothe risk that controls maybecome inadequate because
of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
The Company’s management has assessed the effectiveness
of the Company’s internal control over financial reporting as
of December 28, 2008. In making this assessment, the Company
used the criteria established by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in “Internal
Control-Integrated Framework.” These criteria are in the areas
of control environment, risk assessment, control activities, informa-
tion and communication, and monitoring. The Company’s assess-
ment included extensive documenting, evaluating and testing the
design and operating effectiveness of its internal controls over
financial reporting.
Based on the Company’sprocesses and assessment, as
described above, management has concluded that, as of December
28, 2008, the Company’s internal control over financial reporting
was effective.
The effectiveness of the Company’s internal control over
financial reporting as of December 28, 2008 has been audited by
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, as stated in their report, which appears herein.
William C. Weldon Dominic J. Caruso
Chairman, Board of Directors, Vice President, Finance,
and Chief Executive Officer and Chief Financial Officer