Capital One 1996 Annual Report Download - page 40

Capital One
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The Management of Capital One Financial Corporation
is responsible for the preparation, integrity and fair
presentation of the financial statements and footnotes
contained in this Annual Report. The consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles and are free of material
misstatement. The Company also prepared other informa-
tion included in this Annual Report and is responsible for
its accuracy and consistency with the financial statements.
In situations where financial information must be based
upon estimates and judgments, they represent the best
estimates and judgments of Management.
The consolidated financial statements have been audited
by the Company’s independent public accountants, Ernst &
Young LLP, whose independent professional opinion appears
separately. Their audit provides an objective assessment of
the degree to which the Company’s Management meets its
responsibility for financial reporting. Their opinion on the
financial statements is based on auditing procedures which
include reviewing accounting systems and internal controls
and performing selected tests of transactions and records
as they deem appropriate. These auditing procedures are
designed to provide reasonable assurance that the financial
statements are free of material misstatement.
Management depends on its accounting systems and
internal controls in meeting its responsibilities for reliable
consolidated financial statements. In Management’s
opinion, these systems and controls provide reasonable
assurance that assets are safeguarded and that transac-
tions are properly recorded and executed in accordance
with Management’s authorizations. As an integral part of
these systems and controls, the Company maintains a pro-
fessional staff of internal auditors that conducts opera-
tional and special audits and coordinates audit coverage
with the independent auditors.
The Audit Committee of the Board of Directors, com-
posed solely of outside directors, meets periodically with
the internal auditors, the independent auditors and
Management to review the work of each and ensure that
each is properly discharging its responsibilities. The inde-
pendent auditors have free access to the Committee to
Management’s Report on Consolidated Financial
Statements and Internal Controls Over Financial Reporting
discuss the results of their audit work and their evalua-
tions of the adequacy of accounting systems and internal
controls and the quality of financial reporting.
There are inherent limitations in the effectiveness of
internal controls, including the possibility of human error
or the circumvention or overriding of controls. Accordingly,
even effective internal controls can provide only reasonable
assurance with respect to reliability of financial statements
and safeguarding of assets. Furthermore, because of
changes in conditions, internal control effectiveness may
vary over time.
The Company assessed its internal controls over finan-
cial reporting as of December 31, 1996, in relation to the
criteria described in the “Internal Control-Integrated
Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this
assessment, the Company believes that as of December 31,
1996, in all material respects, the Company maintained
effective internal controls over financial reporting.
Richard D. Fairbank
Chairman and Chief Executive Officer
Nigel W. M orris
President and Chief Operating Officer
James M . Zinn
Senior Vice President and Chief Financial Officer