Paychex 2010 Annual Report Download - page 48

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REPORT ON MANAGEMENT’S ASSESSMENT OF
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of Paychex, Inc. (the “Company”) is responsible for establishing and maintaining an adequate
system of internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the
Consolidated Financial Statements. Our internal control over financial reporting is supported by a program of
internal audits and appropriate reviews by management, written policies and guidelines, and careful selection and
training of qualified personnel.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements and even when determined to be effective, can only provide reasonable assurance with respect to
financial statement preparation and presentation. 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.
The Audit Committee of our Company’s Board of Directors meets with the independent registered public
accounting firm (the “independent accountants”), management, and internal auditors periodically to discuss
internal control over financial reporting and auditing and financial reporting matters. The Audit Committee
reviews with the independent accountants the scope and results of the audit effort. The Audit Committee also meets
periodically with the independent accountants and the chief internal auditor without management present to ensure
that the independent accountants and the chief internal auditor have free access to the Audit Committee. The Audit
Committee’s Report can be found in the Definitive Proxy Statement to be issued in connection with the Company’s
2010 Annual Meeting of Stockholders.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of
May 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in “Internal Control — Integrated Framework.” Based on our
assessment, management believes that the Company maintained effective internal control over financial reporting
as of May 31, 2010.
The Company’s independent accountants, Ernst & Young LLP, an independent registered public accounting
firm, are appointed by its Audit Committee. Ernst & Young LLP has audited and reported on the Consolidated
Financial Statements of Paychex, Inc. and the effectiveness of the Company’s internal control over financial
reporting. The reports of the independent accountants are contained in this Annual Report on Form 10-K.
/s/ Jonathan J. Judge
Jonathan J. Judge
President and Chief Executive Officer
/s/ John M. Morphy
John M. Morphy
Senior Vice President, Chief Financial Officer,
and Secretary
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