Avon 2009 Annual Report Download - page 56

PART II
ITEM 9A. CONTROLS AND
PROCEDURES
Evaluation of Disclosure Controls and
Procedures
As of the end of the period covered by this report, our principal
executive and principal financial officers carried out an evalua-
tion of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Rule 13a-15 of
the Securities Exchange Act of 1934 (the "Exchange Act"). In
designing and evaluating our disclosure controls and procedures,
management recognizes that any controls and procedures, no
matter how well designed and operated, can provide only reason-
able assurance of achieving the desired control objectives, and
management was required to apply its judgment in evaluating
and implementing possible controls and procedures. Based upon
their evaluation, the principal executive and principal financial
officers concluded that our disclosure controls and procedures
were effective as of December 31, 2009, at the reasonable
assurance level. Disclosure controls and procedures are designed
to ensure that information relating to Avon (including our
consolidated subsidiaries) required to be disclosed by us in the
reports we file under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in
the Securities and Exchange Commission’s rules and forms and
to ensure that information required to be disclosed is accumulated
and communicated to management to allow timely decisions
regarding disclosure.
Management’s Report on Internal
Control over Financial Reporting
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term
is defined in Rule 13a-15(f) under theExchange Act. Internal
controlover financial reporting is defined as aprocess designed
by, or under the supervision of, our principal executive and
principal financial officers and effected by our board of directors,
management and other personnel, to provide reasonable
assurance regarding thereliabilityoffinancial reporting and the
preparationoffinancial statements for external purposes in
accordance with generally acceptedaccounting principles, and
includes those policies and procedures that:
•pertain to the maintenance of records that, in reasonable
detail accurately and fairly reflect the transactions and dis-
positions of our assets;
•provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that our receipts and expenditures are being made only in
accordance with authorizations of our management and
directors; and
•provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition
of our assets that could have amaterial effect on the
financial statements.
Internal control over financial reporting cannot provide absolute
assurance of achieving financial reporting objectives because of
its inherent limitations. Internal control over financial reporting is
aprocess that involves human diligence and compliance and is
subject to lapses in judgment and breakdowns resulting from
human failures. Internal control over financial reporting also can
be circumvented by collusion or improper override. Because of
such limitations, there is arisk that material misstatements may
not be prevented or detected on atimely basis by internal control
over financial reporting. However, these inherent limitations are
known features of thefinancial reporting process, and it is possible
to design into the process safeguards to reduce, though not
eliminate, this risk.
Under the supervision and with the participation of our manage-
ment, including our principal executive and principal financial
officers, we assessed as of December 31, 2009, the effectiveness
of our internal control over financial reporting. This assessment
was based on criteria established in the framework in Internal
Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based
on our assessment using those criteria, our management con-
cluded that our internal control over financial reporting as of
December 31, 2009, was effective.
PricewaterhouseCoopers LLP, the independent registered public
accounting firm that audited the financial statements included
in this 2009 Annual Report on Form 10-K, has audited the
effectiveness of our internal control over financial reporting as
of December 31, 2009. Their report is included on page F-2 of
our 2009 Annual Report.
Changes in Internal Control over
Financial Reporting
Our management has evaluated, with the participation of our
principal executive and principal financial officers, whether any
changes in our internal control over financial reporting that
occurred during our last fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting. Based on the evaluation we
conducted, our management has concluded that no such
changes have occurred.
We are implementing an enterprise resource planning (“ERP”)
system on aworldwide basis, which is expected to improve the
efficiency of our supply chain and financial transaction processes.