Capital One 2000 Annual Report Download - page 44

The Management of Capital One Financial Corporation is responsi-
ble 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 accounting principles generally accepted in the
United States and are free of material misstatement. The Company
also prepared other information 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 auditors, Ernst & Young LLP, whose
independent professional opinion appears separately. Their audit
provides an objective assessment of the degree to which the Com-
pany’s Management meets its responsibility for financial reporting.
Their opinion on the financial statements is based on auditing pro-
cedures, 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 inter-
nal controls in meeting its responsibilities for reliable financial
statements. In Management’s opinion, these systems and controls
provide reasonable assurance that assets are safeguarded and
that transactions are properly recorded and executed in accor-
dance with Management’s authorizations. As an integral part of
these systems and controls, the Company maintains a profes-
sional staff of internal auditors that conducts operational and
special audits and coordinates audit coverage with the independ-
ent auditors.
The Audit Committee of the Board of Directors, composed
solely of outside directors, meets periodically with the internal audi-
tors, the independent auditors and Management to review the work
of each and ensure that each is properly discharging its responsi-
bilities. The independent auditors have free access to the
Committee to discuss the results of their audit work and their eval-
uations 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 circum-
vention or overriding of controls. Accordingly, even effective internal
controls can provide only reasonable assurance with respect to reli-
ability 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 financial
reporting as of December 31, 2000, in relation to the criteria
described in the “Internal Control-Integrated Framework” issued by
the Committee of Sponsoring Organizations of the Treadway Com-
mission. Based on this assessment, the Company believes that as
of December 31, 2000, in all material respects, the Company main-
tained effective internal controls over financial reporting.
42 management’s report
Management’s Report on Consolidated
Financial Statements and Internal Controls
Over Financial Reporting
Richard D. Fairbank Nigel W. Morris David M. Willey
Chairman and Chief President and Chief Executive Vice President and
Executive Officer Operating Officer Chief Financial Officer