Avon 2005 Annual Report Download - page 53

2005฀ANNUAL฀REPORT฀฀73
REPORT฀OF฀INDEPENDENT฀REGISTERED฀฀
PUBLIC฀ACCOUNTING฀FIRM
To the Board of Directors and Shareholders of Avon Products, Inc.:
We have completed integrated audits of Avon Products, Inc.’s 2005
and 2004 consolidated financial statements and of its internal
control over financial reporting as of December 31, 2005, and an
audit of its 2003 consolidated 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 balance sheets
and the related consolidated statements of income, cash flows
and changes in shareholders’ equity present fairly, in all mate-
rial respects, the financial position of Avon Products, Inc. and its
subsidiaries at December 31, 2005 and 2004, and the results of
their operations and their cash flows for each of the three years in
the period ended December 31, 2005 in conformity with account-
ing principles generally accepted in the United States of America.
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits
of these statements 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 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 Financial Reporting,
appearing on page 72, that the Company maintained effective
internal control over financial reporting as of December 31,
2005 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 maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2005, based
on criteria established in Internal Control – Integrated Framework
issued by the COSO. The Company’s management is responsible
for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over
financial reporting. 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 assurance 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
control over financial reporting, evaluating management’s assess-
ment, testing and evaluating the design and operating effectiveness
of internal control, and performing 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 principles. A company’s internal control over financial
reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets
of the company; (ii) provide reasonable assurance that transac-
tions 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 manage-
ment and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthor-
ized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over finan-
cial 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 compliance with
the policies or procedures may deteriorate.
New York, New York
February 17, 2006