American Express 2004 Annual Report Download - page 78

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Report of Independent Registered
Public Accounting Firm on Internal
Control over Financial Reporting
The Board of Directors and Shareholders of
American Express Company
We have audited management’s assessment, included
in the accompanying Management’s Report on Internal
Control over Financial Reporting, that American
Express Company maintained effective internal control
over financial reporting as of December 31, 2004, based
on criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO
criteria). American Express Company’s management is
responsible for maintaining effective internal control
over financial reporting and for its assessment of the
effectiveness of internal control over financial report-
ing. Our responsibility is to express an opinion on man-
agement’s assessment and an opinion on the effective-
ness of the company’s internal control over financial
reporting based on our audit.
We conducted our audit in accordance with the stan-
dards of the Public Company Accounting Oversight
Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assur-
ance about whether effective internal control over
financial reporting was maintained in all material
respects. Our audit included obtaining an understand-
ing of internal control over financial reporting, evalu-
ating management’s assessment, testing and evaluating
the design and operating effectiveness of internal con-
trol, and performing such other procedures as we con-
sidered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is
a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external pur-
poses in accordance with generally accepted account-
ing principles. A company’s internal control over finan-
cial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that trans-
actions are recorded as necessary to permit preparation
of financial statements in accordance with generally
accepted accounting principles, and that receipts and
expenditures of the company are being made only in
accordance with authorizations of management and
directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on
the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstate-
ments. Also, projections of any evaluation of effective-
ness to future periods are subject to the risk that con-
trols may become inadequate because of changes in
conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, management’s assessment that Ameri-
can Express Company maintained effective internal
control over financial reporting as of December 31,
2004, is fairly stated, in all material respects, based on
the COSO criteria. Also, in our opinion, American
Express Company maintained, in all material respects,
effective internal control over financial reporting as of
December 31, 2004, based on the COSO criteria.
We also have audited, in accordance with the standards
of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets as of
December 31, 2004 and 2003, and the related consoli-
dated statements of income, shareholders’ equity, and
cash flows for each of the three years in the period
ended December 31, 2004 of American Express Com-
pany and our report dated February 18, 2005 expressed
an unqualified opinion thereon.
New York, New York
February 18, 2005
AXP
AR.04
76
Report of Independent Registered Public Accounting Firm on
Internal Control over Financial Reporting