Avon 2004 Annual Report Download - page 68

Global Beauty 89
Report of Independent Registered
Public Accounting Firm
To the Board of Directors and Shareholders of Avon
Products, Inc.:
We have completed an integrated audit of Avon Prod-
ucts, Inc.’s 2004 consolidated financial statements and
of its internal control over financial reporting as of
December 31, 2004 and audits of its 2003 and 2002 con-
solidated financial statements in accordance with the
standards of the Public Company Accounting Oversight
Board (United States). Our opinions, based on our
audits, are presented below.
Consolidated Financial Statements
In our opinion, the accompanying consolidated bal-
ance sheets and the related consolidated statements of
income, cash flows and changes in shareholders’equity
present fairly, in all material respects, the financial posi-
tion of Avon Products, Inc. and its subsidiaries at
December 31, 2004 and 2003, and the results of their
operations and their cash flows for each of the three
years in the period ended December 31, 2004 in con-
formity with accounting principles generally accepted
in the United States of America. These financial state-
ments are the responsibility of the Company’s man-
agement. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits of these statements in accor-
dance with the standards of the Public Company
Accounting Oversight Board (United States). 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 of financial statements includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates
made by management, and evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Internal Control Over Financial Reporting
Also, in our opinion, management’s assessment, included
in Management’s Report on Internal Control Over Finan-
cial Reporting appearing on page 88 herein, that the
Company maintained effective internal control over
financial reporting as of December 31, 2004 based on
criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), is
fairly stated, in all material respects, based on those
criteria. Furthermore, in our opinion, the Company main-
tained, in all material respects, effective internal control
over financial reporting as of December 31, 2004, based
on criteria established in Internal Control – Integrated
Framework issued by the COSO. The Company’s manage-
ment is responsible for maintaining effective internal
control over financial reporting and for its assessment of
the effectiveness of internal control over financial report-
ing. Our responsibility is to express opinions on man-
agement’s assessment and on the effectiveness of the
Company’s internal control over financial reporting
based on our audit. We conducted our audit of internal
control over financial reporting 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 reasonable assur-
ance about whether effective internal control over
financial reporting was maintained in all material respects.
An audit of internal control over financial reporting
includes obtaining an understanding of internal con-
trol over financial reporting, evaluating management’s
assessment, testing and evaluating the design and
operating effectiveness of internal control, and perform-
ing such other procedures as we consider necessary in
the circumstances. We believe that our audit provides
a reasonable basis for our opinions.
A company’s internal control over financial reporting
is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes
in accordance with generally accepted accounting princi-
ples. A company’s internal control over financial report-
ing includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and disposi-
tions of the assets of the company; (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 the company are being
made only in accordance with authorizations of man-
agement and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposi-
tion of the company’s assets that could have a material
effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstate-
ments. Also, projections of any evaluation of effective-
ness to future periods are subject to the risk that controls
may become inadequate because of changes in con-
ditions, or that the degree of compliance with the
policies or procedures may deteriorate.
New York, New York
February 28, 2005