GE 2010 Annual Report Download - page 33

GE 2010 ANNUAL REPORT 31
Report of Independent Registered
Public Accounting Firm
To Shareowners and Board of Directors
of General Electric Company:
We have audited the accompanying statement of financial
position of General Electric Company and consolidated affiliates
(“GE”) as of December 31, 2010 and 2009, and the related state-
ments of earnings, changes in shareowners’ equity and cash
flows for each of the years in the three-year period ended
December 31, 2010. We also have audited GE’s internal control
over financial reporting as of December 31, 2010, based on
criteria established in Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”). GE management is responsible
for these consolidated financial statements, 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 an opinion on these
consolidated financial statements and an opinion on GE’s inter-
nal 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 state-
ments are free of material misstatement and whether effective
internal control over financial reporting was maintained in all
material respects. Our audits of the consolidated financial state-
ments included examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assess-
ing the accounting principles used and significant estimates made
by management, and evaluating the overall financial statement
presentation. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effec-
tiveness of internal control based on the assessed risk. Our audits
also included performing such other procedures as we consid-
ered necessary in the circumstances. 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 account-
ing principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the main-
tenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the com-
pany; (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 compli-
ance with the policies or procedures may deteriorate.
In our opinion, the consolidated financial statements appear-
ing on pages 66, 68, 70, 72–130 and the Summary of Operating
Segments table on page 39 present fairly, in all material respects,
the financial position of GE as of December 31, 2010 and 2009, and
the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2010, in con-
formity with U.S. generally accepted accounting principles. Also,
in our opinion, GE maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2010,
based on criteria established in Internal Control—Integrated
Framework issued by COSO.
As discussed in Note 1 to the consolidated financial statements,
GE, in 2010, changed its method of accounting for consolidation of
variable interest entities; in 2009, changed its method of account-
ing for impairment of debt securities, business combinations and
noncontrolling interests; and, in 2008, changed its method of
accounting for fair value measurements and adopted the fair
value option for certain financial assets and financial liabilities.
Our audits of GE’s consolidated financial statements were
made for the purpose of forming an opinion on the consolidated
financial statements taken as a whole. The accompanying consoli-
dating information appearing on pages 67, 69 and 71 is presented
for purposes of additional analysis of the consolidated financial
statements rather than to present the financial position, results of
operations and cash flows of the individual entities. The consoli-
dating 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.
KPMG LLP
Stamford, Connecticut
February 25, 2011