Proctor and Gamble 2007 Annual Report Download - page 32

The Procter & Gamble Company
30
Because of the inherent limitations of internal control over nancial
reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may
not be prevented or detected on a timely basis. Also, projections of
any evaluation of the effectiveness of the internal control over nancial
reporting to future periods are subject to the risk that the 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, management’s assessment that the Company maintained
effective internal control over nancial reporting as of June 30, 2007,
is fairly stated, in all material respects, based on the criteria established
in Internal Control — Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission. Also in our
opinion, the Company maintained, in all material respects, effective
internal control over nancial reporting as of June 30, 2007, based on
the criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the Consolidated
Financial Statements as of and for the year ended June 30, 2007, of
the Company and our report dated August 14, 2007, expressed an
unqualied opinion on those nancial statements and included an
explanatory paragraph regarding the Company’s adoption of SFAS
No. 158, “Employers’ Accounting for Dened Benet Pension and
Other Postretirement Plans, an amendment of FASB Statements No. 87,
88, 106, and 132(R),” effective June 30, 2007.
To the Board of Directors and Shareholders of
The Procter & Gamble Company
We have audited management’s assessment, included in Management’s
Report on Internal Control Over Financial Reporting, that The Procter
& Gamble Company and subsidiaries (the “Company”) maintained
effective internal control over nancial reporting as of June 30, 2007,
based on criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission. The Company’s management is responsible for maintaining
effective internal control over nancial reporting and for its assessment
of the effectiveness of internal control over nancial reporting. Our
responsibility is to express an opinion on management’s assessment
and an opinion on the effectiveness of the Company’s internal control
over nancial 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 effective internal control over nancial
reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over nancial reporting,
evaluating management’s assessment, testing and evaluating the design
and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinions.
A company’s internal control over nancial reporting is a process
designed by, or under the supervision of, the company’s principal
executive and principal nancial ofcers, or persons performing
similar functions, and effected by the company’s board of directors,
management, and other personnel to provide reasonable assurance
regarding the reliability of nancial reporting and the preparation of
nancial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over
nancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of
nancial 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 nancial statements.
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Cincinnati, Ohio
August 14, 2007