Advance Auto Parts 2005 Annual Report Download - page 61

Advance Auto Parts I Annual Report 2005 I 59
Management of Advance Auto Parts, Inc. and sub-
sidiaries (the Company) is responsible for establish-
ing and maintaining adequate internal control over
financial reporting. The Company’s internal control
over financial reporting is a process designed under
the supervision of the Company’s principal executive
officer and principal financial officer to provide rea-
sonable assurance regarding the reliability of finan-
cial reporting and the preparation of the Company’s
financial statements for external purposes in accor-
dance with accounting principles generally accepted
in the United States of America.
Our internal control over financial reporting
includes policies and procedures that (1) pertain
to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of
financial statements in accordance with generally
accepted accounting principles, and that receipts and
expenditures of the Company are being made only in
accordance with authorizations of management and
directors of the Company; and (3) provide reasonable
assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of
the Company’s assets that could have a material
effect on the financial statements.
As of December 31, 2005, management assessed
the effectiveness of the Company’s internal control
over financial reporting based on the criteria estab-
lished in Internal Control—Integrated Framework
issued by the Committee of Sponsoring
Organizations of the Treadway Commission
(COSO). Management excluded from their assess-
ment the internal control over financial reporting at
Autopart International, Inc., which was acquired on
September 14, 2005 and whose financial statements
reflect total assets and revenues constituting four and
one percent, respectively, of the related consolidated
financial statement amounts as of and for the year
ended December 31, 2005. Based on this assess-
ment, management has determined that the
Company’s internal control over financial reporting
as of December 31, 2005 is effective. Because of the
inherent limitations of internal control over financial
reporting, including the possibility of collusion or
improper management override of controls, material
misstatements due to error or fraud may not be pre-
vented or detected on a timely basis. Also, projec-
tions of any evaluation of the effectiveness of the
internal control over financial reporting to future
periods are subject to the risk that the controls may
become inadequate because of changes in condi-
tions, or that the degree of compliance with the poli-
cies or procedures may deteriorate.
Deloitte & Touche LLP, the Company’s independ-
ent registered public accounting firm who audited
the Company’s consolidated financial statements,
has issued a report on management’s assessment of
the Company’s internal control over financial report-
ing as of December 31, 2005 which is included on
page 61 herein.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING