Pepsi 2005 Annual Report Download - page 74

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At PepsiCo, our actions — the actions of all our associates — are
governed by our Worldwide Code of Conduct. This code is clearly
aligned with our stated values — a commitment to sustained
growth, through empowered people, operating with responsibility
and building trust. Both the code and our core values enable us to
operate with integrity — both within the letter and the spirit of
the law. Our code of conduct is reinforced consistently at all levels
and in all countries. We have maintained strong governance
policies and practices for many years.
The management of PepsiCo is responsible for the objectivity
and integrity of our consolidated financial statements. The Audit
Committee of the Board of Directors has engaged independent
registered public accounting firm, KPMG LLP, to audit our
consolidated financial statements and they have expressed an
unqualified opinion.
We are committed to providing timely, accurate and understand-
able information to investors. Our commitment encompasses
the following:
Maintaining strong controls over financial reporting. Our system of
internal control is based on the control criteria framework of the
Committee of Sponsoring Organizations of the Treadway
Commission published in their report titled,
Internal Control —
Integrated Framework.
The system is designed to provide reason-
able assurance that transactions are executed as authorized and
accurately recorded; that assets are safeguarded; and that
accounting records are sufficiently reliable to permit the prepara-
tion of financial statements that conform in all material respects
with accounting principles generally accepted in the U.S. We
maintain disclosure controls and procedures designed to ensure
that information required to be disclosed in reports under the
Securities Exchange Act of 1934 is recorded, processed, summa-
rized and reported within the specified time periods. We monitor
these internal controls through self-assessments and an ongoing
program of internal audits. Our internal controls are reinforced
through our Worldwide Code of Conduct, which sets forth our
commitment to conduct business with integrity, and within both
the letter and the spirit of the law.
Exerting rigorous oversight of the business. We continuously review
our business results and strategies. This encompasses financial
discipline in our strategic and daily business decisions. Our
Executive Committee is actively involved — from understanding
strategies and alternatives to reviewing key initiatives and
financial performance. The intent is to ensure we remain objective
in our assessments, constructively challenge our approach to
potential business opportunities and issues, and monitor results
and controls.
Engaging strong and effective Corporate Governance from our Board of
Directors. We have an active, capable and diligent Board that
meets the required standards for independence, and we welcome
the Board’s oversight as a representative of our shareholders. Our
Audit Committee comprises independent directors with the
financial literacy, knowledge and experience to provide appropriate
oversight. We review our critical accounting policies, financial
reporting and internal control matters with them and encourage
their direct communication with KPMG LLP, with our General
Auditor, and with our General Counsel. In 2005, we named a
senior compliance officer to lead and coordinate our compliance
policies and practices.
Providing investors with financial results that are complete,
transparent and understandable. The consolidated financial state-
ments and financial information included in this report are the
responsibility of management. This includes preparing the
financial statements in accordance with accounting principles
generally accepted in the U.S., which require estimates based on
management’s best judgment.
PepsiCo has a strong history of doing what’s right. We realize that
great companies are built on trust, strong ethical standards and
principles. Our financial results are delivered from that culture of
accountability, and we take responsibility for the quality and
accuracy of our financial reporting.
Peter A. Bridgman
Senior Vice President and Controller
Indra K. Nooyi
President and Chief Financial Officer
Steven S Reinemund
Chairman of the Board
and Chief Executive Officer
72
Management’s Responsibility for Financial Reporting
To Our Shareholders: