Avon 2006 Annual Report Download - page 52

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
consolidated financial statements and of its internal control over
financial reporting as of December 31, 2006, 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 and
financial statement schedule
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 material
respects, the financial position of Avon Products, Inc. and its
subsidiaries at December 31, 2006 and December 31, 2005, and
the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2006 in con-
formity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the finan-
cial statement schedule listed in Item 15(a)(2) presents fairly, in
all material respects, the information set forth therein when read
in conjunction with the related consolidated financial state-
ments. These financial statements and financial statement
schedule are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our
audits. We conducted our audits of these statements in accord-
ance 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 mis-
statement. 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 opin-
ion.
As discussed in Note 2 to the consolidated financial statements,
in 2006 the Company changed the manner in which it accounts
for pension and other postretirement benefit plans and the
manner in which it accounts for share-based compensation.
Internal control over financial reporting
Also, in our opinion, management’s assessment, included in
Management’s Report on Internal Control Over Financial Report-
ing, appearing in Item 9A, that the Company maintained effec-
tive internal control over financial reporting as of December 31,
2006 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. Fur-
thermore, in our opinion, the Company maintained, in all
material respects, effective internal control over financial report-
ing as of December 31, 2006, 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 manage-
ment’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, evalu-
ating management’s assessment, testing and evaluating the
design and operating effectiveness of internal control, and per-
forming 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 reli-
ability 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 dis-
positions 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 management and directors of the com-
pany; and (iii) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or dis-
position 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 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.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 28, 2007