ADP 2005 Annual Report Download - page 48

Board of Directors and Stockholders of
Automatic Data Processing, Inc.
Roseland, New Jersey
We have audited the accompanying consolidated balance sheets of
Automatic Data Processing, Inc. and subsidiaries (“the Company”) as
of June 30, 2005 and 2004, and the related consolidated statements
of earnings, stockholders’ equity, and cash flows for each of the
three years in the period ended June 30, 2005. These consolidated
financial statements are the responsibility of the Company’s man-
agement. Our responsibility is to express an opinion on these con-
solidated financial statements based on our audits.
We conducted our audits 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 rea-
sonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the account-
ing principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opin-
ion.
In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of Automatic Data
Processing, Inc. and subsidiaries at June 30, 2005 and 2004, and the
results of their operations and their cash flows for each of the three
years in the period ended June 30, 2005, in conformity with account-
ing principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the effective-
ness of the Company’s internal control over financial reporting as of
June 30, 2005, based on the criteria established in Internal Control-
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, and our report dated
August 17, 2005 expressed an unqualified opinion on management’s
assessment of the effectiveness of the Company’s internal control
over financial reporting and an unqualified opinion on the effective-
ness of the Company’s internal control over financial reporting.
New York, New York
August 17, 2005
46
It is the responsibility of Automatic Data Processing, Inc.’s (“ADP”)
management to establish and maintain effective internal control over
financial reporting (as defined in Rule 13a-15(f) under the Securities
Exchange Act of 1934). Internal control over financial reporting is
designed to provide reasonable assurance to ADP’s management and
board of directors regarding the preparation of reliable financial
statements for external purposes in accordance with generally
accepted accounting principles.
ADP’s internal control over financial reporting includes those poli-
cies and procedures that: (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transac-
tions and dispositions of the assets of ADP; (ii) 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 ADP are being made only in accordance with authorizations of
management and directors of ADP; and (iii) provide reasonable
assurance regarding the prevention or timely detection of unautho-
rized acquisition, use or disposition of ADP’s assets that could have
a material effect on the financial statements of ADP.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even
those systems determined to be effective can provide only reason-
able assurance with respect to financial statement preparation and
presentation.
Management has performed an assessment of the effectiveness of
ADP’s internal control over financial reporting as of June 30, 2005
based upon criteria set forth in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on this assessment, management
determined that ADP’s internal control over financial reporting was
effective as of June 30, 2005.
Management has excluded from its assessment of internal control
over financial reporting at June 30, 2005 its subsidiary, ADP Clearing
and Outsourcing Services, Inc., which holds all the assets of the
Securities Clearing and Outsourcing Services segment that was
formed as a result of an acquisition on November 1, 2004. ADP
Clearing and Outsourcing Services, Inc. represents 1% and 5% of
ADP’s consolidated total revenues and consolidated total assets,
respectively, for the year ended June 30, 2005.
Deloitte & Touche LLP, an independent registered public accounting
firm, has issued an attestation report on management’s assessment
of the internal control over financial reporting, which attestation
report appears herein.
Arthur F. Weinbach
Chairman and Chief Executive Officer
Karen E. Dykstra
Chief Financial Officer
Roseland, New Jersey
August 17, 2005
Management Report on
Internal Control over Financial Reporting
Report of Independent
Registered Public Accounting Firm