Avon 2007 Annual Report Download - page 54

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Avon Products, Inc.:
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 sub-
sidiaries at December 31, 2007 and December 31, 2006, and the
results of their operations and their cash flows for each of the
three years in the period ended December 31, 2007 in conformity
with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement
schedule listed in Item 15(a)(2) presents fairly, in all material
respects, the information set forth therein when read in con-
junction with the related consolidated financial statements. Also
in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of
December 31, 2007, based on criteria established in Internal
Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
The Company’s management is responsible for these financial
statements and financial statement schedule, for maintaining
effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial
reporting, included in Management’s Report on Internal Control
Over Financial Reporting, appearing in Item 9A. Our responsibility
is to express opinions on these financial statements, on the finan-
cial statement schedule, and on the Company’s internal control
over financial reporting based on our integrated audits. We
conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial state-
ments are free of material misstatement and whether effective
internal control over financial reporting was maintained in all
material respects. Our audits of the financial statements included
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. Our
audit of internal control over financial reporting included obtain-
ing an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audits also included per-
forming such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable
basis for our opinions.
As discussed in Note 2 to the consolidated financial statements,
in 2007 the Company changed the manner in which it accounts
for uncertain tax positions. In 2006, the Company changed the
manner in which it accounts for pension and other postretire-
ment benefit plans and the manner in which it accounts for
share-based compensation.
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 21, 2008