Fannie Mae 2002 Annual Report Download - page 124

122 FANNIE MAE 2002 ANNUAL REPORT
To the Stockholders of Fannie Mae:
The management of Fannie Mae is responsible for the preparation, integrity, and fair presentation of the accompanying
financial statements and other information appearing elsewhere in this report. In our opinion, the financial statements have
been prepared in conformity with accounting principles generally accepted in the United States of America appropriate in the
circumstances, and the other financial information in this report is consistent with such statements. In preparing the financial
statements and in developing the other financial information, it has been necessary to make informed judgments and estimates
of the effects of business events and transactions. We believe that these judgments and estimates are reasonable, that the
financial information contained in this report reflects in all material respects the substance of all business events and
transactions to which the corporation was a party, and that all material uncertainties have been appropriately accounted
for or disclosed.
The management of Fannie Mae is also responsible for maintaining internal control over financial reporting that provides
reasonable assurance that transactions are executed in accordance with appropriate authorization, permits preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America, and
establishes accountability for the assets of the corporation.
Internal control over financial reporting includes controls for the execution, documentation, and recording of transactions,
and an organizational structure that provides an effective segregation of duties and responsibilities. Fannie Mae has an internal
Office of Auditing whose responsibilities include monitoring compliance with established controls and evaluating the
corporation’s internal controls over financial reporting. Organizationally, the internal Office of Auditing is independent of
the activities it reviews.
Fannie Mae’s financial statements are audited by KPMG LLP, the corporation’s independent auditors, whose audit is
performed in accordance with auditing standards generally accepted in the United States of America. In addition, KPMG LLP
obtained an understanding of our internal controls over financial reporting and conducted such tests and other auditing
procedures as they considered necessary to express the opinion on the financial statements in their report that follows.
The Board of Directors of Fannie Mae exercises its oversight of financial reporting and related controls through an Audit
Committee, which is composed solely of directors who are not officers or employees of the corporation. The Audit Committee
meets with management and the internal Office of Auditing periodically to review the work of each and to evaluate the
effectiveness with which they discharge their respective responsibilities. In addition, the committee meets periodically with
KPMG LLP, who has free access to the committee, without management present. The appointment of the independent
auditors is made annually by the Board of Directors subject to ratification by the stockholders.
Management recognizes that there are inherent limitations in the effectiveness of any internal control environment. However,
management believes that, as of December 31, 2002, Fannie Mae’s internal control environment, as described herein, provided
reasonable assurance as to the integrity and reliability of the financial statements and related financial information.
Timothy Howard Leanne G. Spencer
Executive Vice President and Senior Vice President and
Chief Financial Officer Controller
Report of Management