Xerox 2007 Annual Report Download - page 135

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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
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, 2007 and 2006, and the results of their
operations and their cash flows for each of the three years
in the period ended December 31, 2007 in conformity
with accounting principles generally accepted in the
United States of America. Also, in our opinion, the
Company maintained, in all material respects, effective
internal control over financial reporting as of
December 31, 2007, based on criteria established in
Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO). The Company’s management is
responsible for these financial statements, for maintaining
effective control over financial reporting and for its
assessment of the effectiveness of internal control over
financial reporting, included in the accompanying
Management’s Report on Internal Control Over Financial
Reporting. Our responsibility is to express opinions on
these financial statements and on the Company’s internal
control over financial reporting based on our integrated
audits. We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free
of material misstatement and whether effective internal
control over financial reporting was maintained in all
material respects. Our audits of the financial statements
included 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.
Our audit of internal control over financial reporting
included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such
other procedures as we considered necessary in the
circumstances. We believe that our audits provide a
reasonable basis for our opinions.
As discussed in Note 1, the Company adopted the
recognition and disclosure provisions of Statement of
Financial Accounting Standards No. 158, “Employers’
Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of FASB Statements
No. 87, 88, 106 and 132(R)” as of December 31, 2006.
A company’s internal control over financial reporting
is a process designed to provide reasonable assurance
regarding the reliability of financial reporting 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 may not prevent or detect
misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in
conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
PricewaterhouseCoopers LLP
Stamford, Connecticut
February 15, 2008
Xerox Annual Report 2007 133