Page 446 - Introduction to Business

420 PART 4 Accounting

EXHIBIT 12.7
Audit Report for DaimlerChrysler Corporation

The Supervisory Board DaimlerChrysler AG:
We have audited the accompanying consolidated balance sheets of Daimler-
Chrysler AG and subsidiaries (“DaimlerChrysler”) as of December 31, 2003 and
2002, and the related consolidated statements of income (loss), changes in stock-
holders' equity, and cash flows for each of the years in the three-year period ended
December 31, 2003. These consolidated financial statements are the responsibility
of DaimlerChrysler's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evi-
dence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant esti-
mates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material aspects, the financial position of DaimlerChrysler as of Decem-
ber 31, 2003 and 2002, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 2003, in conformity
with generally accepted accounting principles in the United States of America.
As described in Note 1 to the consolidated financial statements, DaimlerChrysler
changed its method of accounting for stock-based compensation in 2003. As
described in Notes 1, 2 and 11 to the consolidated financial statements, Daimler-
Chrysler also adopted the required portions of FASB Interpretation No. 46 (revised
December 2003), “Consolidation of Variable Interest Entities—an interpretation of
ARB No. 51”, in 2003. As described in Note 11 to the consolidated financial state-
ments, DaimlerChrysler adopted Statement of Financial Accounting Standards
No. 142, “Goodwill and Other Intangible Assets,” in 2002.
Stuttgart, Germany
February 18, 2004

KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft

Wiedmann Krauß
Wirtschaftsprüfer Wirtschaftsprüfer
Source: DaimlerChrysler Annual Report 2003, p.113. http://www.daimlerchrysler.com/Projects/c2c/
channel/documents/228297_dcag_gb_hv_2003.pdf

accounting data is in contrast to manual accounting, where the auditor can open a
ledger and directly observe the accounting data.
For manual systems, distinct links exist between source documents for an
account cycle, their entry in a journal, the subsequent posting to a ledger, the entry
in a trial balance, and the eventual amount displayed in a financial statement, such
audit trail The connection between a as the income statement or the balance sheet. This link from source document to
source document used to support an
accounting transaction and the financial statement entry is referred to as the audit trail. The audit trail is the con-
financial statements nection between a source document like a sales invoice and the transaction’s

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