Proctor and Gamble 2006 Annual Report Download - page 24

The Procter &Gamble Company and Subsidiaries
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Exerting rigorous oversight of the business. We continuously review
business results and strategic choices. Our Global Leadership Council
is actively involved—from understanding strategies to reviewing key
initiatives, financial performance and control assessments. The intent
is to ensure we remain objective, identify potential issues, continuously
challenge each other and ensure recognition and rewards are
appropriately aligned with results.
Engaging our Disclosure Committee. We maintain disclosure
controls and procedures designed to ensure that information required
to be disclosed is recorded, processed, summarized and reported
timely and accurately. Our Disclosure Committee is a group of senior-
level executives responsible for evaluating disclosure implications of
significant business activities and events. The Committee reports its
findings to the CEO and CFO, providing an effective process to
evaluate our external disclosure obligations.
Encouraging strong and effective corporate governance from our
Board of Directors. We have an active, capable and diligent Board
that meets the required standards for independence, and we welcome
the Board’s oversight. Our Audit Committee comprises independent
directors with significant financial knowledge and experience.
We review significant accounting policies, financial reporting and
internal control matters with them and encourage their independent
discussions with external auditors. Our corporate governance guidelines,
as well as the charter of the Audit Committee and certain other
committees of our Board, are available on our website at www.pg.com.
P&G has a strong history of doing what’s right. Our employees
embrace our Purpose, Values and Principles. We take responsibility for
the quality and accuracy of our financial reporting. We present this
information proudly, with the expectation that those who use it will
understand our Company, recognize our commitment to performance
with integrity and share our confidence in P&G’s future.
At Procter &Gamble, we take great pride in our long history of doing
what’s right. If you analyze what’s made our Company successful
over the years, you may focus on our brands, our marketing strategies,
our organization design and our ability to innovate. But if you really
want to get at what drives our Company’s success, the place to look
is our people. Our people are deeply committed to our Purpose, Values
and Principles. It is this commitment to doing what’s right that unites us.
This commitment to doing what’s right is embodied in our financial
reporting. High quality financial reporting is our responsibility—one we
execute with integrity and within both the letter and spirit of the law.
High quality financial reporting is characterized by accuracy, objectivity
and transparency. Management is responsible for maintaining an
effective system of internal controls over financial reporting to deliver
those characteristics in all material respects. The Board of Directors,
through its Audit Committee, provides oversight. We have engaged
Deloitte &Touche LLP to audit our consolidated financial statements,
on which they have issued an unqualified opinion.
Our commitment to providing timely, accurate and understandable
information to investors encompasses:
Communicating expectations to employees. Every employee —
from senior management on down— is trained on the Company’s
Worldwide Business Conduct Manual, which sets forth the
Company’s commitment to conduct its business affairs with high
ethical standards. Every employee is held personally accountable for
compliance and is provided several means of reporting any concerns
about violations of the Worldwide Business Conduct Manual,
which is available on our website at www.pg.com.
Maintaining a strong internal control environment. Our system of
internal controls includes written policies and procedures, segregation
of duties and the careful selection and development of employees.
The system is designed to provide reasonable assurance that transactions
are executed as authorized and appropriately recorded, that assets
are safeguarded and that accounting records are sufficiently reliable
to permit the preparation of financial statements conforming in all
material respects with accounting principles generally accepted in the
United States of America. We monitor these internal controls through
control self assessments conducted by business unit management. In
addition to performing financial and compliance audits around the
world, including unannounced audits, our Global Internal Audit
organization provides training and continuously improves internal
control processes. Appropriate actions are taken by management to
correct any identified control deficiencies.
Executing financial stewardship. We maintain specific programs
and activities to ensure that employees understand their fiduciary
responsibilities to shareholders. This ongoing effort encompasses
financial discipline in strategic and daily business decisions and brings
particular focus to maintaining accurate financial reporting and effective
controls through process improvement, skill development and oversight.
A.G.Lafley ClaytonC.Daley,Jr.
Chairman of the Board, Chief Financial Officer
President and Chief Executive
Management’s Responsibility for Financial Reporting