American Express 2006 Annual Report Download - page 67

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[ 65 ]
management’s report on internal controls over fi nancial reporting
american express company
MANAGEMENT’S REPORT ON
INTERNAL CONTROL OVER
FINANCIAL REPORTING
The management of American Express Company (the
Company) is responsible for establishing and maintaining
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
reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of
the Company;
• Provide reasonable assurance that transactions
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
• 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
misstatements. 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 Company’s management assessed the
effectiveness of the Company’s internal control over
financial reporting as of December 31, 2006. 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, 2006, the
Company’s internal control over financial reporting
is effective.
PricewaterhouseCoopers LLP, the Company’s
independent 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, 2006.