IBM 1998 Annual Report Download - page 54

Download and view the complete annual report

Please find page 54 of the 1998 IBM annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

Responsibility for the integrity and objectivity of the financial
information presented in this Annual Report rests with IBM
management. The accompanying financial statements have
been prepared in conformity with generally accepted account-
ing principles, applying certain estimates and judgments
as required.
IBM maintains an effective internal control structure. It con-
sists, in part, of organizational arrangements with clearly
defined lines of responsibility and delegation of authority, and
comprehensive systems and control procedures. We believe
this structure provides reasonable assurance that transactions
are executed in accordance with management authorization,
and that they are appropriately recorded, in order to permit
preparation of financial statements in conformity with gener-
ally accepted accounting principles and to adequately
safeguard, verify and maintain accountability of assets. An
important element of the control environment is an ongoing
internal audit program.
To assure the effective administration of internal control, we
carefully select and train our employees, develop and dissem-
inate written policies and procedures, provide appropriate
communication channels, and foster an environment con-
ducive to the effective functioning of controls. We believe that
it is essential for the company to conduct its business affairs
in accordance with the highest ethical standards, as set forth
in the IBM Business Conduct Guidelines. These guidelines,
translated into numerous languages, are distributed to employ-
ees throughout the world, and reemphasized through internal
programs to assure that they are understood and followed.
PricewaterhouseCoopers LLP, independent accountants, is
retained to examine IBM’s financial statements. Its accompa-
nying report is based on an examination conducted in accor-
dance with generally accepted auditing standards, including a
review of the internal control structure and tests of accounting
procedures and records.
The Audit Committee of the Board of Directors is composed
solely of outside directors, and is responsible for recommend-
ing to the Board the independent accounting firm to be
retained for the coming year, subject to stockholder approval.
The Audit Committee meets periodically and privately with the
independent accountants, with our internal auditors, as well
as with IBM management, to review accounting, auditing,
internal control structure and financial reporting matters.
Louis V. Gerstner, Jr. Douglas L. Maine
Chairman of the Board and Senior Vice President and
Chief Executive Officer Chief Financial Officer
REPORT OF MANAGEMENT International Business Machines Corporation and Subsidiary Companies
52