American Express 2005 Annual Report Download - page 59

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MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
The management of American Express Company (the
Company) is responsible for establishing and maintain-
ing adequate internal control over financial reporting.
The 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
purposes in accordance with generally accepted
accounting principles in the United States of America,
and includes those policies and procedures that:
®Pertain to the maintenance of records that, in reason-
able detail, accurately and fairly reflect the transac-
tions and dispositions of the assets of the Company;
®Provide reasonable assurance that transactions are
recorded as necessary to permit preparation of finan-
cial statements in accordance with generally accepted
accounting principles, and that receipts and expendi-
tures of the Company are being made only in
accordance with authorizations of management and
directors of the Company; and
®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 controls
may become inadequate because of changes in condi-
tions, or that the degree of compliance with the policies
or procedures may deteriorate.
The Company’s management assessed the effectiveness
of the Company’s internal control over financial report-
ing as of December 31, 2005. In making this assessment,
the Company’s management used the criteria set forth
by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control —
Integrated Framework.
Based on management’s assessment and those
criteria, we believe that, as of December 31, 2005, the
Company’s internal control over financial reporting
is effective.
PricewaterhouseCoopers LLP, the Company’s indepen-
dent registered public accounting firm, has issued an
audit report appearing on the following page on our
assessment of the effectiveness of the Company’s
internal control over financial reporting as of
December 31, 2005.
Management’s Report
on Internal Control
Over Financial
Reporting
AXP / AR.2005
[57 ]