Xerox 2004 Annual Report Download - page 93

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Internal control over financial reporting
Also, in our opinion, management’s assessment,
included in the accompanying Management’s Report
on Internal Control Over Financial Reporting, that the
Company maintained effective internal control over
financial reporting as of December 31, 2004 based on
criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”),
is fairly stated, in all material respects, based on those
criteria. Furthermore, in our opinion, the Company
maintained, in all material respects, effective internal
control over financial reporting as of December 31,
2004, based on criteria established in Internal Control-
Integrated Framework issued by the COSO. The
Company’s management is responsible for maintain-
ing effective internal control over financial reporting
and for its assessment of the effectiveness of internal
control over financial reporting. Our responsibility is
to express opinions on management’s assessment and
on the effectiveness of the Company’s internal control
over financial reporting based on our audit. We con-
ducted our audit of internal control over financial
reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United
States). Those standards require that we plan and
perform the audit to obtain reasonable assurance
about whether effective internal control over financial
reporting was maintained in all material respects.
Anaudit of internal control over financial reporting
includes obtaining an understanding of internal con-
trol over financial reporting, evaluating management’s
assessment, testing and evaluating the design and
operating effectiveness of internal control, and
performing such other procedures as weconsider
necessary in the circumstances. Webelievethat our
audit provides a reasonable basis for our opinions.
Acompany’s internal control over financial
reporting is a process designed to provide reasonable
assurance regarding the reliability of financial report-
ing and the preparation of financial statements for
external purposes in accordance with generally
accepted accounting principles. A company’s internal
control over financial reporting includes those policies
and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets
of the company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit
preparation of financial statements in accordance
with generally accepted accounting principles, and
that receipts and expenditures of the company are
being made only in accordance with authorizations of
management and directors of the company; and (iii)
provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal
control over financial reporting maynot prevent or
detect misstatements. Also, projections of any evalua-
tion of effectiveness to future periods are subject to the
risk that controls maybecome inadequate because of
changes in conditions, or that the degree of compliance
with the policies or procedures maydeteriorate.
PricewaterhouseCoopers LLP
Stamford, Connecticut
February 21, 2005