Home Depot 2003 Annual Report Download - page 39

The Home Depot, Inc. | 37
MANAGEMENT’S RESPONSIBILITY
FOR FINANCIAL STATEMENTS
The financial statements presented in this Annual Report have
been prepared with integrity and objectivity and are the responsi-
bility of the management of The Home Depot, Inc. These financial
statements have been prepared in conformity with accounting
principles generally accepted in the United States of America and
properly reflect certain estimates and judgments based upon the
best available information.
The Company maintains a system of internal accounting controls,
which is supported by an internal audit program and is designed
to provide reasonable assurance, at an appropriate cost, that the
Company’s assets are safeguarded and transactions are properly
recorded. This system is continually reviewed and modified in
response to changing business conditions and operations and
as a result of recommendations by the external and internal
auditors. In addition, the Company has distributed to associates
its policies for conducting business affairs in a lawful and
ethical manner.
The financial statements of the Company have been audited by
KPMG LLP, independent auditors. Their accompanying report is
based upon an audit conducted in accordance with auditing
standards generally accepted in the United States of America,
including the related review of internal accounting controls and
financial reporting matters.
The Audit Committee of the Board of Directors, consisting solely
of outside directors, meets five times a year with the independent
auditors, the internal auditors and representatives of management
to discuss auditing and financial reporting matters. In addition, a
telephonic meeting is held prior to each quarterly earnings
release. The Audit Committee retains the independent auditors
and regularly reviews the internal accounting controls, the activities
of the outside auditors and internal auditors and the financial
condition of the Company. Both the Company’s independent
auditors and the internal auditors have free access to the
Audit Committee.
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Stockholders
The Home Depot, Inc.:
We have audited the accompanying Consolidated Balance Sheets
of The Home Depot, Inc. and subsidiaries as of February 1, 2004
and February 2, 2003 and the related Consolidated Statements of
Earnings, Stockholders’ Equity and Comprehensive Income, and
Cash Flows for each of the fiscal years in the three-year period
ended February 1, 2004. These Consolidated Financial Statements
are the responsibility of the Company’s management. Our respon-
sibility is to express an opinion on these Consolidated Financial
Statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those stan-
dards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the Consolidated Financial Statements referred to
above present fairly, in all material respects, the financial position
of The Home Depot, Inc. and subsidiaries as of February 1, 2004
and February 2, 2003, and the results of their operations and their
cash flows for each of the years in the three-year period ended
February 1, 2004, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in Note 1to the Consolidated Financial Statements,
effective February 3, 2003, the Company changed its method of
accounting for cash consideration received from a vendor to con-
form to Emerging Issues Task Force No. 02-16 and adopted the
fair value method of recording stock-based compensation
expense in accordance with Statement of Financial Accounting
Standards No. 123.
KPMG LLP
Atlanta, Georgia
February 23, 2004
Robert L. Nardelli
Chairman, President and
Chief Executive Officer
Kelly H. Barrett
Vice President
Corporate Controller
Carol B. Tomé
Executive Vice President and
Chief Financial Officer