Capital One 2006 Annual Report Download - page 133

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115
MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of Capital One Financial Corporation (the Company) is responsible for establishing and maintaining adequate
internal control over financial reporting and for the assessment of the effectiveness of internal control over financial
reporting. As defined by the SEC, internal control over financial reporting is a process designed under the supervision of the
Companys principal executive and principal financial officers, and effected by the companys board of directors,
management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements in accordance with generally accepted accounting principles.
The Companys internal control over financial reporting is supported by written policies and procedures, that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
Companys assets; (2) 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 the Companys management and directors; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition 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 all misstatements.
Projections 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.
Management of the Company conducted an assessment of the effectiveness of the Companys 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 (the COSO Framework). As allowed for by the SEC
under the current year acquisition scope exception, managements assessment of the effectiveness of the internal control over
financial reporting excludes the evaluation of the internal controls over financial reporting of North Fork Bancorporation and
its subsidiaries (North Fork), which were acquired on December 1, 2006. North Fork represents approximately $58.7
billion of total assets and $14.3 billion of net assets as of December 31, 2006 and approximately $160.1 million of revenues
and $37.5 million of net income for the year ended December 31, 2006, of our consolidated financial statements.
Based on this assessment, management has concluded that the Companys internal control over financial reporting was
effective as of December 31, 2006.
Managements assessment of the effectiveness of the Companys internal control over financial reporting as of December 31,
2006 has been audited by Ernst and Young LLP, the independent registered public accounting firm that audited the
Companys financial statements, as stated in their report, a copy of which is included in this annual report on Form 10-K.
/s/ RICHARD D. FAIRBANK
/s/ GARY L. PERLIN
Chairman and Chief Executive Officer Chief Financial Officer