Responsibility for financial statements
by Raphael Gordon Source: Financial Gleaner, April 16, 1999
The company is responsible for the objectivity and integrity of the accompanying consolidated financial statements, which have been prepared in conformity with generally accepted accounting principles. The financial statements of necessity include the company’s estimates and judgements relating to matters not concluded by year end.
Financial information contained elsewhere in the annual report is consistent with that included in the financial statements.
The company maintains a system of internal accounting controls that includes careful selection and development of employees, division of duties and written accounting and operating policies and procedures, augmented by a continuing internal audit programme.
Assurance
Although there are .inherent limitations to the effectiveness of any system of accounting controls, the company believes that its system provides reasonable
— but not absolute — assurance .that its assets are safeguarded from unauthorised use or disposition and that its accounting records are sufficiently reliable to permit the preparation of financial statements that conform in material respects with generally accepted accounting principles.KPMG Peat Marwick, independent auditors, are engaged to render an independent opinion regarding the fair presentation in the financial statements of the company’s financial condition and operating results.
Standards
They have reported. Their examination was made in accordance with generally accepted accounting standards and included a review of the system of internal accounting controls to the extent they considered necessary to determine the audit procedures required to support their opinion.
The audit committee of the board of directors is composed solely of directors who are not employees of the company. The committee meets periodically and privately with the internal auditors and the financial officers of the company to review matters relating to the quality of the financial reporting of the company, the internal accounting controls and the scope and results of audit examinations.
The committee also reviews compliance with the company’s statement of policy as to the conduct of its business, including proper accounting, financial reporting and management of the relationship with the auditors.
In addition, it is responsible for recommending the appointment of the company’s independent auditors, subject to. stockholder approval.
Quoted companies in Jamaica should consider the implementation of some of the control features adopted by USA quoted companies.
* Mr. Raphael E. Gordon is a partner
of KPMG Peat Marwick, immediate past president of the Institute of Chartered Accountants
of Jamaica and a director of The Institute of Chartered Accountants of the Caribbean .