2K Sports 2008 Annual Report Download - page 63

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(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that our
receipts and expenditures are being made only in accordance with authorizations of our
management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of our assets that could have a material effect on our financial
statements.
Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our
internal controls will prevent or detect all errors and all fraud. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all
control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness
of controls in future periods is subject to the risk that those internal controls may become inadequate
because of changes in business conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an evaluation of
the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on this evaluation, management has concluded that our internal control over
financial reporting was effective as of October 31, 2008. Our independent registered public accounting
firm, E&Y, has issued an attestation report on our internal control over financial reporting. The report on
the audit of internal control over financial reporting appears on page 61 of this Form 10-K.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during 2008, which were identified
in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under
the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Item 9B. Other Information
None
53