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These excerpts taken from the PAYX 10-K filed Jul 18, 2008. REPORT ON
MANAGEMENT’S ASSESSMENT OF
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of Paychex, Inc. (the “Company”) is
responsible for establishing and maintaining an adequate system
of internal control over financial reporting as such term is
defined in
Rules 13a-15(f)
and
15d-15(f)
under the Securities Exchange Act of 1934, as amended. The
Company’s internal control over financial reporting is
designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of the
Consolidated Financial Statements. Our internal control over
financial reporting is supported by a program of internal audits
and appropriate reviews by management, written policies and
guidelines, careful selection and training of qualified
personnel, and a written Code of Business Ethics and Conduct
adopted by our Company’s Board of Directors, applicable to
all Company Directors and all officers and employees of our
Company.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements and
even when determined to be effective, can only provide
reasonable assurance with respect to financial statement
preparation and presentation. 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 Audit Committee of our Company’s Board of Directors
meets with the independent public accountants, management, and
internal auditors periodically to discuss internal control over
financial reporting and auditing and financial reporting
matters. The Audit Committee reviews with the independent public
accountants the scope and results of the audit effort. The Audit
Committee also meets periodically with the independent public
accountants and the chief internal auditor without management
present to ensure that the independent public accountants and
the chief internal auditor have free access to the Audit
Committee. The Audit Committee’s Report can be found in the
Definitive Proxy Statement to be issued in connection with the
Company’s 2008 Annual Meeting of Stockholders.
Management assessed the effectiveness of the Company’s
internal control over financial reporting as of May 31,
2008. In making this assessment, management used the criteria
set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in “Internal Control —
Integrated Framework.” Based on our assessment, management
believes that the Company maintained effective internal control
over financial reporting as of May 31, 2008.
The Company’s independent public accountants,
Ernst & Young LLP, a registered public accounting
firm, are appointed by its Audit Committee. Ernst &
Young LLP has audited and reported on the Consolidated Financial
Statements of Paychex, Inc., management’s assessment of the
effectiveness of the Company’s internal control over
financial reporting and the effectiveness of the Company’s
internal control over financial reporting. The reports of the
independent public accountants are contained in this Annual
Report on
Form 10-K.
Table of Contents
REPORT ON MANAGEMENT’S ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL REPORTING Management of Paychex, Inc. (the “Company”) is responsible for establishing and maintaining an adequate system of internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Consolidated Financial Statements. Our internal control over financial reporting is supported by a program of internal audits and appropriate reviews by management, written policies and guidelines, careful selection and training of qualified personnel, and a written Code of Business Ethics and Conduct adopted by our Company’s Board of Directors, applicable to all Company Directors and all officers and employees of our Company. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. 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 Audit Committee of our Company’s Board of Directors meets with the independent public accountants, management, and internal auditors periodically to discuss internal control over financial reporting and auditing and financial reporting matters. The Audit Committee reviews with the independent public accountants the scope and results of the audit effort. The Audit Committee also meets periodically with the independent public accountants and the chief internal auditor without management present to ensure that the independent public accountants and the chief internal auditor have free access to the Audit Committee. The Audit Committee’s Report can be found in the Definitive Proxy Statement to be issued in connection with the Company’s 2008 Annual Meeting of Stockholders. Management assessed the effectiveness of the Company’s internal control over financial reporting as of May 31, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control — Integrated Framework.” Based on our assessment, management believes that the Company maintained effective internal control over financial reporting as of May 31, 2008. The Company’s independent public accountants, Ernst & Young LLP, a registered public accounting firm, are appointed by its Audit Committee. Ernst & Young LLP has audited and reported on the Consolidated Financial Statements of Paychex, Inc., management’s assessment of the effectiveness of the Company’s internal control over financial reporting and the effectiveness of the Company’s internal control over financial reporting. The reports of the independent public accountants are contained in this Annual Report on Form 10-K.
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