July 18, 2002
Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission FILED ELECTRONICALLY
Mail Stop 6-9
450 Fifth Street, N.W.
Washington, DC 20549
RE: File No. S7-21-02
Dear Mr. Katz:
We appreciate the Commission's efforts in advancing the quality of financial reports. We agree that it is timely and appropriate for CEOs and CFOs to expand their representations on financial statements.
We also would like the Commission to consider some of our preliminary comments on the SEC's proposed rule: Certification of Disclosure in Companies' Quarterly and Annual Reports, File No. S7-21-02. We will submit a more comprehensive response prior to the August 19, 2002 deadline.
We think the proposed certification process could be improved by substituting a "Report of Management" with SEC filings. This "Report" is already published in many companies' annual reports (see Exhibit I for our most recent Report). The Report, signed by our CEO and CFO, among other representations, accepts responsibility for the financial statements as having been prepared in accordance with US GAAP. We welcome and would suggest expanding this Report and requiring it to be filed in a manner similar to the proposed certificate. This approach is appropriate because:
Report of Management Computer Sciences Corporation
The consolidated financial statements included in this report are the responsibility of Computer Sciences Corporation management and have been prepared in conformity with generally accepted accounting principles. These consolidated financial statements include amounts that are based upon management's best estimates and judgement. All financial data included in this report is consistent with the information included in the consolidated financial statements.
The Company maintains a system of internal accounting controls, which in the opinion of management provides reasonable assurance that assets are safeguarded and that transactions are executed and recorded in accordance with management's authorization. The system is tested and evaluated on a regular basis by the Company's internal auditors as well as by the independent auditors during their annual audit. To ensure the effective administration of internal controls, the Company carefully selects and trains its employees and provides them with a written Code of Ethics and Standards of Conduct.
The Board of Directors has appointed an Audit Committee composed entirely of outside directors who are not members of management. The Audit Committee meets regularly with management, the internal auditors and the independent auditors, to ensure that each is properly discharging its responsibilities. The independent auditors and internal auditors may periodically meet alone with the Audit Committee to discuss appropriate matters.
Van B. Honeycutt
Leon J. Level