Mattel 1998 Annual Report Download - page 54

Mattel, Inc. and Subsidiaries 52
Report of Independent Accountants
To the Board of Directors and Stockholders of
Mattel, Inc.
In our opinion, based on our audits and the report of other auditors,
the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders’ equity and
of cash flows present fairly, in all material respects, the financial
position of Mattel, Inc. and its subsidiaries at December 31, 1998
and 1997, and the results of their operations and their cash flows
for each of the three years in the period ended December 31,
1998, in conformity with generally accepted accounting principles.
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 did not audit the
financial statements of Tyco Toys, Inc. and its subsidiaries, which
statements reflect net sales of $720,954,000 for the year ended
December 31, 1996. Those statements were audited by other
auditors whose report thereon has been furnished to us, and our
opinion expressed herein, insofar as it relates to the amounts
included for Tyco Toys, Inc. and its subsidiaries, is based solely on
the report of the other auditors. We conducted our audits of
these statements in accordance with generally accepted auditing
standards 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
and the report of other auditors provide a reasonable basis for the
opinion expressed above.
Los Angeles, California
February 1, 1999
Management Report on Responsibility
for Financial Reporting
Management is responsible for the preparation of the Company’s
consolidated financial statements and the related financial and
non-financial information appearing in this annual report. The
financial statements have been prepared in accordance with
generally accepted accounting principles and, in the opinion of
management, present fairly the Company’s financial position,
results of operations and cash flows. The financial statements
necessarily contain some amounts that are based on the best
estimates and judgments of management.
The Company maintains accounting and internal control
systems which management believes are adequate to provide
reasonable assurance, in relation to reasonable cost, as to the
integrity and reliability of the financial statements and as to
protection of assets from unauthorized use or disposition. The
selection and training of qualified personnel, the establishment
and communication of accounting and administrative policies and
procedures, and a program of internal audit are important elements
of these control systems.
The Company’s internal auditors are directed to examine
the adequacy and effectiveness of the Company’s system of
internal accounting, administrative and operational controls. They
conduct formal and systematic reviews to determine that operations
are adequately controlled and to assure that assets are effectively
safeguarded.
The board of directors has appointed an audit committee,
composed entirely of nonemployee directors. The committee
meets regularly with financial management, internal auditors and
the independent accountants to review accounting control,
auditing and financial reporting matters.
PricewaterhouseCoopers LLP, independent accountants,
have been retained to audit the Company’s consolidated financial
statements.They conduct a review of internal accounting controls
to the extent required by generally accepted auditing standards
and perform such tests and related procedures as they deem
necessary to arrive at an opinion on the fairness of the financial
statements.
Harry J. Pearce
Chief Financial Officer