Avon 2005 Annual Report Download - page 52

REPORT฀OF฀MANAGEMENT฀ON฀INTERNAL฀CONTROL฀฀
OVER฀FINANCIAL฀REPORTING
Avon’s management is responsible for establishing and maintain-
ing 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 report-
ing 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 per-
sonnel, 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
principles, and includes those policies and procedures that:
• pertain to the maintenance of records that in reasonable 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 detec-
tion of unauthorized acquisition, use or disposition of Avon’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 misstatements. Also, projec-
tions 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 compliance with
the policies or procedures may deteriorate.
Under the supervision and with the participation of Avon’s man-
agement, including its principal executive and principal financial
officers, Avon assessed as of December 31, 2005, the effective-
ness 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, 2005 was effective.
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, who audited and reported on Avon’s consoli-
dated financial statements included in this report, has audited our
management’s assessment of the effectiveness of Avon’s internal
control over financial reporting as of December 31, 2005 and
issued a report on management’s assessment of internal control
over financial reporting, which is included on page 73 herein.