Pepsi 2011 Annual Report Download - page 83

The Board of Directors and Shareholders
PepsiCo, Inc.:
We have audited the accompanying Consolidated Balance Sheets
of PepsiCo, Inc. and subsidiaries (“PepsiCo, Inc.” or “the Company”)
as of December31, 2011 and December25, 2010, and the related
Consolidated Statements of Income, Cash Flows and Equity for each
of the scal years in the three- year period ended December31, 2011.
We also have audited PepsiCo, Inc.’s internal control over nancial
reporting as of December31, 2011, 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
nancial statements, for maintaining eective internal control
overnancial reporting, and for its assessment of the eectiveness
of internal control over nancial reporting, included in the accom-
panying Management’s Report on Internal Control over Financial
Reporting. Our responsibility is to express an opinion on these
consolidated nancial statements and an opinion on the Company’s
internal control over nancial 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 nancial statements are
free of material misstatement and whether eective internal control
over nancial reporting was maintained in all material respects. Our
audits of the consolidated nancial statements included examining,
on a test basis, evidence supporting the amounts and disclosures in
the nancial statements, assessing the accounting principles used
and signicant estimates made by management, and evaluating the
overall nancial statement presentation. Our audit of internal con-
trol over nancial reporting included obtaining an understanding
of internal control over nancial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and
operating eectiveness 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 nancial reporting is a process
designed to provide reasonable assurance regarding the reliability
of nancial reporting and the preparation of nancial statements
for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over nancial
reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately
and fairly reect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of nancial 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 eect
on the nancial statements.
Because of its inherent limitations, internal control over nancial
reporting may not prevent or detect misstatements. Also, pro-
jections of any evaluation of eectiveness 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 nancial statements referred to
above present fairly, in all material respects, the nancial position
of PepsiCo, Inc. as of December31, 2011 and December25, 2010,
and the results of its operations and its cash ows for each of the
scal years in the three- year period ended December31, 2011, in
conformity with U.S. generally accepted accounting principles. Also
in our opinion, PepsiCo, Inc. maintained, in all material respects,
eective internal control over nancial reporting as of December31,
2011, based on criteria established in Internal Control — Integrated
Framework issued by COSO.
The scope of management’s assessment of the eectiveness of
internal control over nancial reporting excluded the internal con-
trol over nancial reporting of Wimm- Bill-Dann Foods OJSC and its
subsidiaries (“WBD”), which the Company acquired in February 2011.
WBD represented 9% of the Company’s consolidated total assets
and 4% of the Company’s consolidated net revenues as of and for
the year ended December31, 2011. Our audit of internal control over
nancial reporting of PepsiCo, Inc. also excluded an evaluation of
the internal control over nancial reporting of WBD.
New York, New York
February27, 2012
Report of Independent Registered Public Accounting Firm
PepsiCo, Inc.  Annual Report
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