Walgreens 2011 Annual Report Download - page 42

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, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Walgreen Co. and Subsidiaries as
of August 31, 2011 and 2010, and the results of their operations and their cash
flows for each of the three years in the period ended August 31, 2011, 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 August 31, 2011, based on the criteria
established in Internal Control – Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
DELOITTE & TOUCHE LLP
Chicago, Illinois
October 25, 2011
Gregory D. Wasson
President and Chief Executive Officer
To the Board of Directors and Shareholders of Walgreen Co.:
We have audited the accompanying consolidated balance sheets of Walgreen Co.
and Subsidiaries (the “Company”) as of August 31, 2011 and 2010, and the related
consolidated statements of earnings, shareholders’ equity, and cash flows for each
of the three years in the period ended August 31, 2011. We also have audited
the Company’s internal control over financial reporting as of August 31, 2011,
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 these financial statements, for
maintaining effective internal control over financial reporting, and for its assess-
ment of the effectiveness of internal control over financial reporting, included in
the accompanying Management’s Report on Internal Control. Our responsibility
is to express an opinion on these financial statements and an opinion on the
Company’s internal control over financial reporting based on our 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 audit 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.
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
Management’s Report on Internal Control
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we conducted
an evaluation of the effectiveness of our internal control over financial reporting
based on the framework in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based
on our evaluation, management concluded that our internal control over financial
reporting was effective as of August 31, 2011. Deloitte & Touche LLP, the Company’s
independent registered public accounting firm, has audited our internal control over
financial reporting, as stated in its report which is included herein.
Wade D. Miquelon
Executive Vice President and
Chief Financial Officer
Report of Independent Registered Public Accounting Firm
Page 40 2011 Walgreens Annual Report