Capital One 2001 Annual Report Download - page 42

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 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 Compa-
ny’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 ap-
propriate. 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 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 accordance with Management’s au-
thorizations. As an integral part of these systems and controls, the
Company maintains a professional staff of internal auditors that
conducts operational and special audits and coordinates audit cover-
age with the independent auditors.
The Audit Committee of the Board of Directors, composed 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
independent auditors have free access to the Committee to discuss the
results of their audit work and their evaluations of the adequacy of ac-
counting systems and internal controls and the quality of financial re-
porting.
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 finan-
cial 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, 2001, in relation to the criteria described in the “In-
ternal 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, 2001, in all
material respects, the Company maintained effective internal controls
over financial reporting.
40 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 President and Executive Vice President and
Chief Executive Officer Chief Operating Officer Chief Financial Officer