Avon 2004 Annual Report Download - page 67

Management’s Report
on Internal Control Over
Financial Reporting
Avon’s management is responsible for establishing and
maintaining adequate internal control over financial
reporting, as such term is defined in Rule 13a-15(f) under
the Securities Exchange Act of 1934 (the “Exchange
Act”). Internal control over financial reporting is defined
as a process designed by, or under the supervision of,
Avon’s principal executive and principal financial officers
and effected by Avon’s board of directors, management
and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external pur-
poses in accordance with generally accepted account-
ing principles, and includes those policies and
procedures that:
• pertain to the maintenance of records that, in reason-
able detail accurately and fairly reflect the transactions
and dispositions of the assets of Avon;
• 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 Avon are being made only in
accordance with authorizations of management
and directors of Avon; and
• provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use
or disposition of Avon’s assets that could have a mate-
rial effect on the financial statements.
Because of its inherent limitations, internal control
over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk
that controls may become inadequate because of
changes in conditions, or that the degree of compli-
ance with the policies or procedures may deteriorate.
Under the supervision and with the participation of
Avon’s management, including its principal executive
and principal financial officers, Avon assessed as of
December 31, 2004, the effectiveness of Avon’s internal
control over financial reporting. This assessment was
based on criteria established in the framework in Internal
Control – Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
Based on Avon’s assessment using those criteria, Avon’s
management concluded that Avon’s internal control over
financial reporting as of December 31, 2004, was effective.
Avon’s assessment of the effectiveness of Avon’s internal
control over financial reporting as of December 31, 2004,
has been audited by PricewaterhouseCoopers LLP, and
independent registered public accounting firm, as stated
in their report which is included on page 89 herein.