Pepsi 2005 Annual Report Download - page 76

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Report of Independent Registered Public Accounting Firm
We have audited the accompanying Consolidated Balance Sheet of
PepsiCo, Inc. and Subsidiaries as of December 31, 2005 and
December 25, 2004 and the related Consolidated Statements of
Income, Cash Flows and Common Shareholders’ Equity for each of
the years in the three-year period ended December 31, 2005. We
have also audited management’s assessment, included in
Management’s Report on Internal Control over Financial
Reporting, that PepsiCo, Inc. and 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).
PepsiCo, Inc.’s management is responsible for these consolidated
financial statements, for maintaining effective internal control
over financial reporting, and for its assessment of the effective-
ness of internal control over financial reporting. Our responsibility
is to express an opinion on these consolidated financial state-
ments, an opinion on management’s assessment, and an opinion
on the effectiveness of PepsiCo, Inc.’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 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 mate-
rial respects. Our audit of 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 evaluat-
ing the overall financial statement presentation. Our audit of
internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, evaluat-
ing 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 circum-
stances. We believe that our audits provide a reasonable basis for
our opinions.
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 finan-
cial 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 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 PepsiCo, Inc. and Subsidiaries as of December 31, 2005 and
December 25, 2004, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 2005, in conformity with United States generally
accepted accounting principles. Also, in our opinion, manage-
ment’s assessment that PepsiCo, Inc. maintained effective
internal control over financial reporting as of December 31, 2005,
is fairly stated, in all material respects, based on criteria
established in
Internal Control — Integrated Framework issued by
COSO. Furthermore, in our opinion, PepsiCo, Inc. maintained, in
all material respects, effective internal control over financial
reporting as of December 31, 2005, based on criteria established
in Internal Control — Integrated Framework issued by COSO.
KPMG LLP
New York, New York
February 24, 2006
Board of Directors and Shareholders PepsiCo, Inc.: