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REPORT OF MANAGEMENT
We are responsible for the preparation and integrity of the
consolidated financial statements appearing in our Annual
Report. The consolidated financial statements were
prepared in conformity with United States generally
accepted accounting principles and include amounts based
on management’s estimates and judgments. All other
financial information in this report has been presented
on a basis consistent with the information included in the
financial statements.
We are also responsible for establishing and maintaining
adequate internal control over financial reporting. We maintain
a system of internal control that is designed to provide
reasonable assurance as to the fair and reliable preparation
and presentation of the consolidated financial statements,
as well as to safeguard assets from unauthorized use or
disposition.
Our control environment is the foundation for our
system of internal control over financial reporting and is
embodied in our Business Ethics Policy. It sets the tone
of our organization and includes factors such as integrity and
ethical values. Our internal control over financial reporting is
supported by formal policies and procedures which are
reviewed, modified and improved as changes occur in business
conditions and operations.
The Audit Committee of the Board of Directors, which
is composed solely of independent directors, meets periodically
with members of management, the internal auditors
and the independent auditors to review and discuss internal
control over financial reporting and accounting and financial
reporting matters. The independent auditors and internal
auditors report to the Audit Committee and accordingly have
full and free access to the Audit Committee at any time.
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. This evaluation included
review of the documentation of controls, evaluation of the
design effectiveness of controls, testing of the operating
effectiveness of controls and a conclusion on this evaluation.
Although there are inherent limitations in the effectiveness
of any system of internal control over financial reporting,
based on our evaluation, we have concluded with
reasonable assurance that our internal control over financial
reporting was effective as of November 30, 2007.
Our internal control over financial reporting as of
November 30, 2007 has been audited by Ernst & Young LLP.
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Internal Control Over Financial Reporting
The Board of Directors and Shareholders of
McCormick & Company, Incorporated
We have audited McCormick & Company, Incorporated’s
internal control over financial reporting as of November 30,
2007, based on the criteria established in Internal Control –
Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (the
COSO criteria). McCormick & Company, Incorporated’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
included in the accompanying Report of Management. Our
responsibility is to express an opinion on 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, assessing the risk that a material weakness
exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a
process designed 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 its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
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