●  American Airlines Group Inc. · FY 2023 

Controls & Procedures

American Airlines Group concluded that its systems for recording, processing, and communicating financial information were effective as of the end of 2023. This assessment determined that internal controls over financial reporting were maintained effectively, a conclusion supported by an independent auditor's unqualified opinion. The company reported that no material weaknesses or significant deficiencies were identified during the reporting period.

AAL L1 Synthesis
●  SYMBOLOGY.ONLINE l1 SYNTHESIS 

American Airlines Group Inc Controls & Procedures Synthesis

Internal Controls and Procedures Assessment Report

Management's Conclusions on Control Effectiveness

Management of American Airlines Group Inc. (AAG) and American Airlines, Inc. (American) has concluded that both their disclosure controls and procedures and their internal control over financial reporting (ICFR) were effective as of December 31, 2023.

Disclosure Controls and Procedures
  • Conclusion: Management concluded that AAG's and American's disclosure controls and procedures were effective as of December 31, 2023, at the reasonable assurance level.
  • Scope: These controls are designed to ensure that required information is recorded, processed, summarized, and communicated timely to management (including the CEO and CFO) for required disclosure.
Internal Control over Financial Reporting (ICFR)
  • Conclusion: Management assessed and concluded that AAG and American maintained effective internal control over financial reporting as of December 31, 2023.
  • Criteria: This assessment was conducted using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework (2013).
  • Auditor Opinion: The independent registered public accounting firm issued an unqualified opinion, stating that the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023.

Identification of Deficiencies and Changes

  • Material Weaknesses/Significant Deficiencies: No material weaknesses or significant deficiencies were identified in the reporting period.
  • Changes to Controls: There were no changes reported during the quarter ended December 31, 2023, in AAG's or American's internal control over financial reporting that materially affected or was reasonably likely to materially affect the controls.
  • Remediation Efforts: No remediation efforts were necessary, as no control deficiencies were identified.
  • New Controls/Procedures: No noteworthy new controls or procedures were introduced during the reporting period.

Assessment of Control Design and Strengths

The company's ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting. Key strengths and components include:

  • Record Maintenance: Policies pertain to maintaining records that accurately and fairly reflect the transactions and dispositions of assets.
  • Authorization: Controls provide reasonable assurance that receipts and expenditures are made only in accordance with authorizations of management and directors.
  • Asset Protection: Controls provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could materially affect financial statements.

Balanced Assessment and Inherent Limitations (Weaknesses)

While the controls were deemed effective, the report includes standard cautionary language regarding inherent limitations:

  • Limitation on Assurance: The company explicitly states that no controls system can provide absolute assurance, and no evaluation can guarantee the detection of all control issues or instances of fraud.
  • Risk Factors: Internal controls may not prevent or detect all misstatements due to inherent limitations. Furthermore, the effectiveness of future controls is subject to risks that conditions may change or compliance with policies may deteriorate.