Walgreens 2012 Annual Report Download - page 45

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, 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, 2012 and 2011, and the results of their operations and their cash
flows for each of the three years in the period ended August 31, 2012, 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, 2012, 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 19, 2012
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, 2012 and 2011, and the related
consolidated statements of comprehensive income, shareholders’ equity, and cash
flows for each of the three years in the period ended August 31, 2012. We also
have audited the Company’s internal control over financial reporting as of August
31, 2012, 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 assessment
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
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, manage-
ment concluded that our internal control over financial reporting was effective as of
August 31, 2012. 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 and
President, International
Report of Independent Registered Public Accounting Firm
2012 Walgreens Annual Report 43