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This excerpt taken from the LLY 10-K filed Feb 22, 2010. Management’s
Report for Financial Statements—Eli Lilly and Company and
Subsidiaries
Management of Eli Lilly and Company and subsidiaries is
responsible for the accuracy, integrity, and fair presentation
of the financial statements. The statements have been prepared
in accordance with generally accepted accounting principles in
the United States and include amounts based on judgments and
estimates by management. In management’s opinion, the
consolidated financial statements present fairly our financial
position, results of operations, and cash flows.
In addition to the system of internal accounting controls, we
maintain a code of conduct (known as The Red Book) that
applies to all employees worldwide, requiring proper overall
business conduct, avoidance of conflicts of interest, compliance
with laws, and confidentiality of proprietary information.
The Red Book is reviewed on a periodic basis with
employees worldwide, and all employees are required to report
suspected violations. A hotline number is published in The
Red Book to enable employees to report suspected violations
anonymously. Employees who report suspected violations are
protected from discrimination or retaliation by the company. In
addition to The Red Book, the CEO, and all financial
management must sign a financial code of ethics, which further
reinforces their fiduciary responsibilities.
The consolidated financial statements have been audited by
Ernst & Young LLP, an independent registered public
accounting firm. Their responsibility is to examine our
consolidated financial statements in accordance with generally
accepted auditing standards of the Public Company Accounting
Oversight Board (United States). Ernst & Young’s
opinion with respect to the fairness of the presentation of the
statements is included in Item 8 of our annual report on
Form 10-K.
Ernst & Young reports directly to the audit committee
of the board of directors.
Our audit committee includes five nonemployee members of the
board of directors, all of whom are independent from our
company. The committee charter, which is available on our web
site, outlines the members’ roles and responsibilities and
is consistent with enacted corporate reform laws and
regulations. It is the audit committee’s responsibility to
appoint an independent registered public accounting firm subject
to shareholder ratification, approve both audit and nonaudit
services performed by the independent registered public
accounting firm, and review the reports submitted by the firm.
The audit committee meets several times during the year with
management, the internal auditors, and the independent public
accounting firm to discuss audit activities, internal controls,
and financial reporting matters, including reviews of our
externally published financial results. The internal auditors
and the independent registered public accounting firm have full
and free access to the committee.
We are dedicated to ensuring that we maintain the high standards
of financial accounting and reporting that we have established.
We are committed to providing financial information that is
transparent, timely, complete, relevant, and accurate. Our
culture demands integrity and an unyielding commitment to strong
internal practices and policies. Finally, we have the highest
confidence in our financial reporting, our underlying system of
internal controls, and our people, who are objective in their
responsibilities and operate under a code of conduct and the
highest level of ethical standards.
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