414 Planning and Forecasting
The U.S. Congress addressed the issue of controlling what they saw to be
improper activ ities, by passing the Foreign Corrupt Practices Act of 1977.The
key features of this law were:
- The prohibition of bribery of foreign governmental or political officials
in order to promote business. - The requirement that firms (a) keep accurate and detailed records of the
company financial activities and (b) maintain a system of internal ac-
counting controls sufficient to provide reasonable assurance that transac-
tions are properly authorized, recorded, and accounted for.
The above requirements are incorporated as amendments to Section 13(b)
of the Securities Exchange Act of 1934,and apply to all publicly held companies.
The record-keeping and internal control features of the Actwere a response to
claims that companies had been unaware of bribery payments, because their in-
ternal control systems had failed to detect or prevent them.
In a report addressed to the SEC, the National Commission on Fraudu-
lent Financial Reporting, made the following recommendation:
All public companies should be required by SEC rule to include in their annual
reports to stockholders management reports signed by the chief executive officerEXHIBIT 12.36 Report of management: Delta Air Lines Inc., year ended
June 30, 2000.
The integrity and objectivity of the information presented in this Annual Report are the
responsibility of Delta management. The financial statements contained in this report have
been audited by Arthur Andersen LLP, independent public accountants, whose report
appears below.
Delta maintains a system of internal financial controls that are independently assessed on
an ongoing basis through a program of internal audits. These controls include the selection
and training of Delta’s managers, organizational arrangements that provide a division of
responsibilities, and communication programs explaining our policies and standards. We
believe that this system provides reasonable assurance that transactions are executed in
accordance with management’s authorization; that transactions are appropriately recorded
to permit preparation of financial statements that, in all material respects, are presented in
conformity with accounting principles generally accepted in the United States; and that
assets are properly accounted for and safeguarded against loss from unauthorized use.
The Board of Directors pursues its responsibilities for these financial statements through
its Audit Committee, which consists solely of directors who are neither officers nor employees
of Delta. The Audit Committee meets periodically with the independent public accountants,
the internal auditors and representatives of management to discuss internal control,
accounting, auditing and financial reporting matters.
M. Michele Burns Leo F. Mullin
Executive Vice President and Chairman and
Chief Financial Officer Chief Executive Officer
SOURCE: Delta Air Lines Inc., annual report, June 2000, 53.