LabCorp 2008 Annual Report Download - page 33

Laboratory Corporation of America
Laboratory Corporation of America® Holdings 2008 31
Report of Independent Registered
Public Accounting Firm
In our opinion, the consolidated balance sheets and related consolidated statements of operations,
changes in shareholders’ equity, and cash flows present fairly, in all material respects,
the financial position of Laboratory Corporation of America Holdings and its subsidiaries at
December 31, 2008 and 2007, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2008 in conformity with accounting
principles generally accepted in the United States of America. Also in our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2008, based on criteria established in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
The Company’s management is responsible for these financial statements, for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of inter-
nal control over financial reporting, included in Report of Management on Internal Control Over
Financial Reporting. Our responsibility is to express opinions on these financial statements and
on the Company’s internal control over financial reporting based on our integrated 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 statements are free of material
misstatement and whether effective internal control over financial reporting was maintained in
all material respects. Our audits of the financial statements included 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. 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
effectiveness 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.
As discussed in Note 14 to the consolidated financial statements, the Company changed the
manner in which it accounts for uncertain tax positions in 2007.
As discussed in Note 17 to the consolidated financial statements, the Company changed the
manner in which it accounts for defined and other postretirement plans as of December 31, 2006.
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.
Because of its inherent limitations, internal control over financial 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 compliance with the policies or procedures may deteriorate.
As described in the Report of Management on Internal Controls Over Financial Reporting,
management has excluded its Ontario, Canada operations from its assessment of internal control
over financial reporting as of December 31, 2008 because this operation was acquired by the
Company in a purchase business combination during 2008. We have also excluded the Ontario,
Canada operations from our audit of internal control over financial reporting. The total assets
and total revenues of the Ontario operations represent 3.4% and 5.5%, respectively, of the related
consolidated financial statement amounts as of and for the year ended December 31, 2008.
PricewaterhouseCoopers LLP
Greensboro, North Carolina
February 25, 2009
To the Board of Directors and Shareholders of
Laboratory Corporation of America Holdings