Philips 2013 Annual Report Download - page 129

11 Group financial statements 11.2 - 11.3
Annual Report 2013 129
financial reporting is set out in section 11.1, Management’s report on
internal control, of this Annual Report. KPMG Accountants N.V. has also
issued reports on the consolidated financial statements in accordance
with Dutch law, including the Dutch standards on auditing, which is set out
in section 11.10, Independent auditor’s report - Group, of this Annual
Report, and in accordance with auditing standards of the Public Company
Accounting Oversight Board in the US, which will be included in the Annual
Report on Form 20-F expected to be filed with the US Securities and
Exchange Commission on February 25, 2014. KPMG Accountants N.V. has
also reported separately on the Company Financial Statements of
Koninklijke Philips N.V. This audit report is set out in section 12.5,
Independent auditor’s report - Company, of this Annual Report.
11.3 Auditor’s report on internal control over financial reporting
Report of Independent Registered Public Accounting Firm
To the Supervisory Board and Shareholders of Koninklijke Philips N.V.:
We have audited Koninklijke Philips N.V. and subsidiaries’ internal control
over financial reporting as of December 31, 2013, based on criteria
established in Internal Control — Integrated Framework (1992) issued by
the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Koninklijke Philips N.V.’s Board of Management is responsible for
maintaining eective internal control over financial reporting and for its
assessment of the eectiveness of internal control over financial reporting,
included in the accompanying section 11.1, “Management’s report on
internal control”, of this Annual Report. Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based
on our audit.
We conducted our audit 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 eective internal control over financial reporting was
maintained in all material respects. Our audit 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 eectiveness of internal control based on the assessed risk.
Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
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 (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (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 eect 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 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, Koninklijke Philips N.V. and subsidiaries maintained, in all
material respects, eective internal control over financial reporting as of
December 31, 2013, based on criteria established in Internal Control —
Integrated Framework (1992) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated
balance sheets of Koninklijke Philips N.V. and subsidiaries as of December
31, 2013 and 2012, and the related consolidated statements of income,
comprehensive income, cash flows, and changes in equity for each of the
years in the three-year period ended December 31, 2013, and our report
dated February 25, 2014, expressed an unqualified opinion on those
consolidated financial statements.
KPMG Accountants N.V.
Amsterdam, The Netherlands
February 25, 2014