American Express 1998 Annual Report Download - page 58

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The management of American Express Company (the
Company) is responsible for the preparation and fair pre-
sentation of its consolidated financial statements, which
have been prepared in conformity with generally accepted
accounting principles appropriate in the circumstances,
and include amounts based on the best judgment of man-
agement. The Company’s management is also responsible
for the accuracy and consistency of other financial infor-
mation included in this annual report.
In recognition of its responsibility for the integrity
and objectivity of data in the financial statements, the
Company maintains a system of internal control over
financial reporting which is designed to provide reasonable,
but not absolute, assurance with respect to the reliability
of the Company’s financial statements. The concept of
reasonable assurance is based on the notion that the cost
of the internal control system should not exceed the
benefits derived.
The internal control system is founded on an ethi-
cal climate and includes: (i) an organizational structure
REPORT OF MANAGEMENT
REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS
with clearly defined lines of responsibility, policies and
procedures, (ii) a Code of Conduct, and (iii) the careful
selection and training of employees. Internal auditors
monitor and assess the effectiveness of the internal con-
trol system and report their findings to management and
the Board of Directors throughout the year. The
Company’s independent auditors are engaged to express
an opinion on the year-end financial statements and, with
the coordinated support of the internal auditors, review
the financial records and related data and test the inter-
nal control system over financial reporting.
The Audit Committee of the Board of Directors,
which has only outside directors, meets regularly with
the internal auditors, management and independent
auditors to review their work and discuss the Company’s
financial controls and audit and reporting practices. The
independent auditors and the internal auditors indepen-
dently have full and free access to the Committee, without
the presence of management, to discuss any matters which
they feel require attention.
THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF AMERICAN EXPRESS COMPANY
We have audited the accompanying consolidated balance
sheets of American Express Company as of December
31, 1998 and 1997, and the related consolidated state-
ments of income, shareholders’ equity, and cash flows for
each of the three years in the period ended December 31,
1998. These financial statements are the responsibility
of the management of American Express Company. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with gener-
ally accepted auditing standards. Those standards 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. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the consoli-
dated financial position of American Express Company
at December 31, 1998 and 1997, and the consolidated
results of its operations and its cash flows for each of the
three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.
New York, New York
February 4, 1999