Sunoco 2010 Annual Report Download - page 117

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this report, the
Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure
controls and procedures. This evaluation was carried out under the supervision and with the participation of the
Company’s management, including the Company’s Chairman, Chief Executive Officer and President and the
Company’s Senior Vice President and Chief Financial Officer. Based upon that evaluation, the Company’s
Chairman, Chief Executive Officer and President and the Company’s Senior Vice President and Chief Financial
Officer concluded that the Company’s disclosure controls were not effective as a result of a material weakness in
internal control over financial reporting related to the accounting for income taxes as described below. Disclosure
controls and procedures are designed to ensure that information required to be disclosed in company reports filed
or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that information required to be disclosed
in company reports filed under the Exchange Act is accumulated and communicated to management, including
the Company’s Chairman, Chief Executive Officer and President and the Company’s Senior Vice President and
Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.
Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting and assessing the effectiveness of such controls. Management’s Annual Report on Internal
Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm on Internal
Control Over Financial Reporting are included below in this Item 9A. Notwithstanding the material weakness in
accounting for income taxes, management believes that the consolidated financial statements included in this
Annual Report on Form 10-K fairly present, in all material respects, the financial position of Sunoco, Inc. and
subsidiaries at December 31, 2010 and 2009 and their consolidated results of operations and cash flows for each of
the three years in the period ended December 31, 2010 in conformity with U.S. generally accepted accounting
principles.
Management’s Annual Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S.
generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all
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.
The Company’s management assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2010. In making this assessment, the Company’s management used the criteria set
forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (the “COSO criteria”). Based on this assessment, management believes that, as of
December 31, 2010, the Company’s internal control over financial reporting was not effective as a result of a
material weakness in internal control over financial reporting related to the accounting for income taxes. A
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