Safeway 2004 Annual Report Download - page 56

54 SAFEWAY INC. 2004 ANNUAL REPORT
The Board of Directors and
Stockholders of Safeway Inc:
We have audited management’s assessment, included in the
accompanying “Management’s Annual Report on Internal
Controls Over Financial Reporting,” that Safeway Inc. and
subsidiaries (the “Company”) maintained effective internal
control over financial reporting as of January 1, 2005, 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 financial reporting and for its
assessment of the effectiveness of internal control over
financial 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
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 effective internal control over financial reporting
was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial
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 financial reporting is a
process designed by, or under the supervision of, the
company’s principal executive and principal financial officers,
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 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 effect on the
financial statements.
Because of the inherent limitations of internal control
over financial 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 financial 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 financial
reporting as of January 1, 2005, 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
financial reporting as of January 1, 2005, 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 January 1, 2005 of the Company, and
our report dated March 15, 2005 expressed an unqualified
opinion (and included an explanatory paragraph relating
to the adoption of a new accounting standard) on those
consolidated financial statements.
San Francisco, California
March 15, 2005
Report of Independent Registered Public Accounting
Firm on Internal Control Over Financial Reporting