Annual Report - CoBank

Report of Independent AuditorsCoBank, ACBTo the Board of Directors and Shareholders of CoBank, ACB:In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of changes inshareholders' equity and of cash flows appearing on pages 64 through 68 of the CoBank 2011 Annual Report to Shareholders presentfairly, in all material respects, the financial position of CoBank, ACB and its subsidiaries (CoBank) at December 31, 2011, 2010 and2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 inconformity with accounting principles generally accepted in the United States of America. Also in our opinion, CoBank maintained, inall material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established inInternal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO). CoBank’s management is responsible for these financial statements, for maintaining effective internal control over financialreporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report onInternal Control Over Financial Reporting appearing on page 114 of the CoBank 2011 Annual Report to Shareholders. Ourresponsibility is to express opinions on these consolidated financial statements and on CoBank’s internal control over financialreporting based on our integrated audits. We conducted our audits in accordance with generally accepted auditing standardsestablished by the Auditing Standards Board (United States) and in accordance with the standards of the Public Company AccountingOversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement and whether effective internal control over financial reporting wasmaintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made bymanagement, and evaluating the overall financial statement presentation. Our audit of internal control over financial reportingincluded obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, andtesting and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also includedperforming such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonablebasis for our opinions.CoBank 2011 Annual Report112