IBM 2000 Annual Report Download - page 52

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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
accounting principles, applying certain estimates and judg-
ments as required.
IBM maintains an effective internal control structure. It
consists, 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 con-
formity with generally 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
disseminate written policies and procedures, provide appro-
priate communication channels, and foster an environment
conducive 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 distrib-
uted to employees throughout the world, and reemphasized
through internal programs to assure that they are under-
stood and followed.
PricewaterhouseCoopers LLP, independent accountants,
is retained to examine IBM’s financial statements. Its accom-
panying report is based on an examination conducted in
accordance 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 com-
posed solely of outside directors, and is responsible for
recommending 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 inter-
nal auditors, as well as with IBM management, to review
accounting, auditing, internal control structure and financial
reporting matters.
Louis V. Gerstner, Jr. John R. Joyce
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
page no.
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