Pepsi 2006 Annual Report Download - page 80

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To Our Shareholders:
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 objec-
tivity 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
understandable 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 reasonable assurance that transactions
are executed as authorized and accurately recorded; that
assets are safeguarded; and that accounting records are suffi-
ciently reliable to permit the preparation of financial
statements that conform in all material respects with
accounting principles generally accepted in the U.S. We main-
tain 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,
summarized and reported within the specified time periods.
We monitor these internal controls through self-assessments
and an ongoing program of internal audits. Our internal con-
trols 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 dili-
gent Board that meets the required standards for
independence, and we welcome the Board’s oversight as a
representative of our shareholders. Our Audit Committee is
comprised of independent directors with the financial liter-
acy, 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. We also
have 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
statements and financial information included in this report
are the responsibility of management. This includes prepar-
ing the financial statements in accordance with accounting
principles generally accepted in the U.S., which require esti-
mates based on management’s best judgment.
PepsiCo has a strong history of doing what’s right. We real-
ize 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 responsibil-
ity for the quality and accuracy of our financial reporting.
Peter A. Bridgman
Senior Vice President and Controller
Richard Goodman
Chief Financial Officer
Indra K. Nooyi
President and Chief Executive Officer
Management’s Responsibility for Financial Reporting
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