Xerox 2002 Annual Report Download - page 95

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Report of Management
Our management is responsible for the integrity and
objectivity of all information presented in this annual
report. The consolidated financial statements were
prepared in conformity with generally accepted
accounting principles in the United States of America
and include amounts based on management’s best
estimates and judgments.
We maintain an internal control structure designed
to provide reasonable assurance that assets are safe-
guarded against loss or unauthorized use and that
financial records are adequate and can be relied upon
to produce financial statements in accordance with
generally accepted accounting principles. This struc-
ture includes the hiring and training of qualified
people, written accounting and control policies and
procedures, clearly drawn lines of accountability and
delegations of authority. In a business ethics policy
that is communicated annually to all employees, we
have established our intent to adhere to the highest
standards of ethical conduct in all of our business
activities.
We monitor our internal control structure with
direct management reviews and a comprehensive
program of internal audits. In addition, Pricewater-
houseCoopers LLP, independent accountants, have
audited the 2002, 2001 and 2000 consolidated finan-
cial statements to the extent they considered neces-
sary and have considered the internal controls over
financial reporting in order to determine their audit
procedures for the purpose of expressing an opinion
on our consolidated financial statements.
The Audit Committee of the Board of Directors,
which is composed solely of outside directors, meets
regularly with the independent accountants, the inter-
nal auditors and representatives of management to
review audits, financial reporting and internal control
matters, as well as the nature and extent of the audit
effort. The Audit Committee also recommends the
engagement of the independent accountants. The
independent accountants and internal auditors have
free access to the Audit Committee.
Anne M. Mulcahy
Chairman and Chief Executive Officer
Lawrence A. Zimmerman
Senior Vice President and Chief Financial Officer
Gary R. Kabureck
Assistant Controller and Chief Accounting Officer
Report of Independent Accountants
To the Board of Directors and Shareholders of Xerox
Corporation:
In our opinion, the accompanying consolidated
balance sheets and the related consolidated
statements of income, cash flows and common
shareholders’ equity present fairly, in all material
respects, the financial position of Xerox Corporation
and its subsidiaries at December 31, 2002 and 2001,
and the results of their operations and their cash
flows for each of the three years in the period ended
December 31, 2002 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
responsibility is to express an opinion on these
financial statements based on our audits. We
conducted our audits of these statements 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.
As discussed in Note 1, the Company adopted
the provisions of Statement of Financial Accounting
Standards No. 142, “Goodwill and Other Intangible
Assets” on January 1, 2002.
PricewaterhouseCoopers LLP
Stamford, Connecticut
January 28, 2003, except for Note 15, which is as of
March 27, 2003
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