Xerox 2003 Annual Report Download - page 93

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91
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 accounting principles
generally accepted 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 accurate and complete financial state-
ments. This structure 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 busi-
ness ethics policy that is continuously communicated
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,
PricewaterhouseCoopers LLP, our independent audi-
tors, have audited the 2003, 2002 and 2001
Consolidated Financial Statements in accordance with
auditing standards generally accepted in the United
States of America and considered the internal controls
over financial reporting to determine their audit proce-
dures 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 independent directors,
meets regularly with the independent auditors, the
internal auditors and representatives of management
to review audits, financial reporting and internal con-
trol matters, as well as the nature and extent of the
audit effort. The Audit Committee is responsible for
the engagement of the independent auditors. The
independent auditors 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
Vice President and Chief Accounting Officer
Report of Independent
Auditors
To the Board of Directors and Shareholders of Xerox
Corporation:
In our opinion, the accompanying consolidated bal-
ance sheets and the related consolidated statements
of income, cash flows and common shareholders’
equity present fairly, in all material respects, the finan-
cial position of Xerox Corporation and its subsidiaries
at December 31, 2003 and 2002, and the results of their
operations and their cash flows for each of the three
years in the period ended December 31, 2003 in con-
formity 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 assur-
ance 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, in 2003 the Company
adopted the provisions of the Financial Accounting
Standards Board Interpretation No. 46R,
“Consolidation of Variable Interest Entities, an
Interpretation of ARB 51,” which changed certain con-
solidation policies. Additionally, 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 27, 2004