IBM 2001 Annual Report Download - page 56

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54
Report of Independent Accountants
TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF
INTERNATIONAL BUSINESS MACHINES CORPORATION:
In our opinion, the accompanying consolidated financial
statements, appearing on pages 70 through 105, present
fairly, in all material respects, the financial position of Inter-
national Business Machines Corporation and subsidiary
companies at December 31, 2001 and 2000, and the results
of their operations and their cash flows for each of the three
years in the period ended December 31, 2001, in conformity
with accounting principles generally accepted in the United
States of America. These financial statements are the
responsibility of the company’s management; our responsi-
bility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these state-
ments in accordance with auditing standards generally
accepted in the United States of America, which 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, assessing the accounting principles used
and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
January 17, 2002
Report of Management
INTERNATIONAL BUSINESS MACHINES CORPORATION
and Subsidiary Companies
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 distributed
to employees 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 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 stock-
holder approval. The Audit Committee meets periodically
and privately with the independent accountants, with the
company’s internal auditors, as well as with IBM management,
to review accounting, auditing, internal control structure
and financial reporting matters.
Samuel J.Palmisano John R. Joyce
President and Senior Vice President and
Chief Executive Officer Chief Financial Officer