ABB Annual Report 2012 PDF - ABB Group Annual Report 2012

Report of the Group Auditor on internal control over financial reportingTo the Board of Directors and Stockholders of ABB Ltd, ZurichWe have audited ABB Ltd’s internal control over financial reporting as ofDecember 31, 2012, based on criteria established in Internal Control –Integrated Framework issued by the Committee of Sponsoring Organizationsof the Treadway Commission (the COSO criteria). ABB Ltd’s Board of Directorsand management are responsible for maintaining effective internal controlover financial reporting, and management is responsible for its assessment ofthe effectiveness of internal control over financial reporting included in theaccompanying Report of management on internal control over financial reporting.Our responsibility is to express an opinion on the company’s internalcontrol over financial reporting based on our audit.We conducted our audit in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance aboutwhether effective internal control over financial reporting was maintained in allmaterial respects. Our audit included obtaining an understanding of internalcontrol over financial reporting, assessing the risk that a material weaknessexists, testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk, and performing such other proceduresas we considered necessary in the circumstances. We believe that our auditprovides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company’s internalcontrol over financial reporting includes those policies and procedures that(1) pertain to the maintenance of records that, in reasonable detail, accuratelyand fairly reflect the transactions and dispositions of the assets of the company;(2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance withgenerally accepted accounting principles, and that receipts and expendituresof the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition,use, or disposition of the company’s assets that could have a material effecton the financial statements.Because of its inherent limitations, internal control over financial reportingmay not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls maybecome inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.In our opinion, ABB Ltd maintained, in all material respects, effective internalcontrol over financial reporting as of December 31, 2012, based on the COSOcriteria.We also have audited, in accordance with Swiss law, Swiss Auditing Standardsand the standards of the Public Company Accounting Oversight Board(United States), the 2012 consolidated financial statements of ABB Ltd and ourreport dated March 14, 2013, expressed an unqualified opinion thereon.Ernst & Young LtdNigel JonesLicensed audit expert(Auditor in charge)Zurich, SwitzerlandMarch 14, 2013John CassidyU.S. Certified Public AccountantABB Annual Report 2012 | Financial review 137