Avon 2003 Annual Report Download - page 3

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management’s opinion
22
Avon takes seriously the imperative expressed in Winston Churchill’s statement
that “Responsibility is the price of greatness.” Responsibility defines our busi-
ness policies and practices, including the critically important arenas of corpo-
rate governance and financial oversight. In early 2003, Avon’s Board of Directors
adopted a new Code of Business Conduct and Ethics that governs all aspects
of business behavior. The Code applies to every Avon associate and Director.
The Board has full oversight regarding implementation of the Code.
Commitment to Financial Reporting and Internal Controls. Avon also is fully
committed to reporting its financial results and business prospects according to
the highest standards of accuracy, completeness and timeliness. We continually
monitor and, when necessary, revise our financial reporting processes and sys-
tems to ensure that they reflect the most current and appropriate accounting
policies. We work hard to make certain that we apply those policies consis-
tently. We also aim to be as clear and understandable as possible in the presen-
tation of our financial reports, and we welcome any suggestions for improving
their transparency and usability.
Avon maintains an internal control structure, which is designed to provide reason-
able assurance that assets are safeguarded and that transactions are executed
in accordance with appropriate authorization and accounting procedures. Avon’s
internal audit department evaluates and formally reports to management on the
adequacy and effectiveness of our internal controls.
The audit committee of the Board of Directors, comprised solely of independent
Directors, has full oversight responsibility for the Company’s financial reporting
and internal controls. This committee met ten times in 2003 with management,
PricewaterhouseCoopers LLP, the Company’s independent auditors, as well as
internal audit staff, in fulfilling its responsibilities. PricewaterhouseCoopers and
Avon’s own internal auditors have free access to management and to the audit
committee to discuss the results of their activities and the adequacy of controls.
Financial Disclosure Practices. In addition, all of Avon’s financial disclosures are
monitored by the Company’s disclosure committee, which is comprised of a
wide representation of management. This disclosure committee works to ensure
that we disclose fully, fairly and in a timely manner the state of our business and
any material transactions or events impacting our business. A broader group
convenes quarterly to evaluate the content of both our earnings releases and
conference call remarks with investors regarding the Company’s quarterly
earnings reports and future outlook.
Avon is committed to providing visibility to its current results and future
prospects. To promote understanding of our business, our performance and
our strategies, Avon’s management team frequently presents at conferences of
investors and meets with investment firms and analysts throughout the year.
We are careful to issue news releases to disclose and disseminate as widely as
possible any material comments made during these interactions. Also, all group
presentations are webcast in real time from our Web site in order to provide
access to the general public.
Management Representations. The accompanying consolidated financial state-
ments of Avon Products, Inc. report the results of our operations for the year
2003. They have been prepared by management in conformity with accounting
principles generally accepted in the U.S., and necessarily include amounts that
are based on judgements and estimates. The report of PricewaterhouseCoopers
LLP is the result of their audits on these consolidated financial statements, and
was performed in accordance with generally accepted auditing standards.
It is management’s opinion that Avon’s internal control structure provides reason-
able assurance that operations are managed in a responsible and professional
manner, and with a commitment to the highest standards of business conduct.
We remain committed to maintaining integrity and transparency in reporting our
operating results, and to further enhancing the controls that ensure the accu-
racy, completeness and timeliness of our reporting.
Report of Management