Prudential 2006 Annual Report Download - page 92

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Prudential Financial, Inc.:
We have completed integrated audits of Prudential Financial, Inc.’s consolidated financial statements and of its internal control over
financial reporting as of December 31, 2006 in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Our opinions, based on our audits, are presented below.
Consolidated financial statements
In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of operations,
of stockholders’ equity and of cash flows present fairly, in all material respects, the financial position of Prudential Financial, Inc. and its
subsidiaries at December 31, 2006 and 2005 and the results of their operations and their cash flows for each of the three years in the period
ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit of financial statements includes 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. We believe that our audits provide a reasonable basis for our
opinion.
Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The
accompanying supplemental combining financial information is presented for the purposes of additional analysis of the consolidated
financial statements rather than to present the financial position and results of operations of the individual components. Such supplemental
information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and, in our opinion,
is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole.
As described in Note 2 of the consolidated financial statements, the Company changed its method of accounting for defined benefit
pension and other postretirement plans on December 31, 2006 and for certain nontraditional long-duration contracts and separate accounts
on January 1, 2004.
Internal control over financial reporting
Also, in our opinion, management’s assessment, included in the accompanying Management’s Annual Report on Internal Control
Over Financial Reporting, that the Company maintained effective internal control over financial reporting as of December 31, 2006 based
on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on criteria
established in Internal Control - Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our
responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial
reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of
internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating
management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other
procedures as we consider necessary in the circumstances. We believe that our audit provides 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 (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 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 (iii) 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.
PRUDENTIAL FINANCIAL, INC. 2006 ANNUAL REPORT
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