American Express 2002 Annual Report Download - page 87

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I85 AXP IREPORT OF MANAGEMENT
REPORT OF MANAGEMENT
The management of American Express Company (the company) is responsible for the preparation and fair presentation of its
Consolidated Financial Statements, which have been prepared in conformity with accounting principles generally accepted in
the United States, and include amounts based on the best judgment of management. The company’s management is also
responsible for the accuracy and consistency of other financial information 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 ethical climate and includes: (i) an organizational structure with clearly defined
lines of responsibility, policies and procedures; (ii) a Code of Conduct; and (iii) a careful selection and training of employees.
Internal auditors monitor and assess the effectiveness of the internal control 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 internal control system over financial reporting to the extent they believed necessary to support
their report.
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 independently have full and free access to the Audit
Committee, without the presence of management, to discuss any matters which they feel require attention.