American Eagle Outfitters 2006 Annual Report Download - page 45

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that
information required to be disclosedin our reports under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated to the management of
American Eagle Outfitters, Inc. (the “Management”), including our Principal Executive Officer and our Principal
Financial Officer,as appropriate, to allowtimely decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, Management recognized that any controls and procedures, no
matter how well designed and operated,canprovide only reasonable assurance of achieving the desired control
objectives.
In connection with thepreparation of this Annual Report on Form 10-K as of February 3, 2007, an evaluation
was performed under thesupervision andwith theparticipation of our Management, including the Principal
Executive Officer and Principal Financial Officer, of the effectiveness of the design andoperation of the
Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based
upon that evaluation, our Principal Executive Officer and our Principal Financial Officer have concluded that our
disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period
covered by this Annual Report on Form 10-K.
Management’s Annual Report on Internal Control Over Financial Reporting
Our Management is responsible for establishing and maintaining adequate internal controlover financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal controlover financial reporting is
designed to provide areasonable assurance to our Management and our Board regarding the preparation andfair
presentation of published financial statements.
All internal controlsystems, no matter how well designed have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect tofinancial statement
preparation andpresentation.
Our Management assessed the effectiveness of our internal controlover financial reporting as of February 3,
2007. In making this assessment,our Management used the criteria set forth by the CommitteeofSponsoring
Organizations of the Treadway Commission (COSO) in Internal Control –Integrated Framework. Based on this
assessment,our Management concluded that we maintainedeffective internal controlover financial reporting as
of February 3, 2007.
Our Management’s assessmentofthe effectiveness of internal control over financial reporting as of February 3,
2007, has been audited by Ernst &Young LLP, the independent registered public accounting firm who also
audited our Consolidated Financial Statements. Ernst &Young’s attestation report on Management’s assessment
of our internal controlover financial reporting is located below.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controlover financial reporting during the threemonths ended February 3,
2007 that have materially affected, or arereasonably likely to materially affect, our internal controlover financial
reporting.
PAGE 60 ANNUAL REPORT 2006
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of
American Eagle Outfitters, Inc.
We have audited management’s assessment, included in the accompanying Management’s Annual Report on
Internal Control over Financial Reporting, that American Eagle Outfitters, Inc. (the “Company”) maintained
effective internal controlover financial reporting as of February 3, 2007, based on criteria established in Internal
Control –Integrated Framework issued by the CommitteeofSponsoring Organizations of the Treadway
Commission (the COSO criteria). American EagleOutfitters, Inc.’s management is responsible for maintaining
effective internal controlover financial reporting andfor its assessment of the effectiveness of internal control
over financial reporting. Our responsibility is to express an opinion on management’s assessmentand an opinion
on the effectiveness of the Company’s internal control over financial reporting based on our audit.
We conductedouraudit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal controlover financial reporting was maintained in allmaterial respects. Our audit
included obtaining an understanding of internal controlover financial reporting, evaluating management’s
assessment,testing and evaluating the design andoperating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Acompany’s internal control over financial reporting is aprocess designed to provide reasonable assurance
regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in
accordance with generally accepted accounting principles. Acompany’s internal control over financial reporting
includes thosepolicies and procedures that(1) pertain to the maintenance of records that, in reasonable detail,
accuratelyand fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance thattransactions 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 amaterial effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also,projections of any evaluation of effectiveness to future periods are subject totherisk that
controls maybecome inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures maydeteriorate.
In our opinion, management’s assessment that American EagleOutfitters, Inc. maintained effective internal
control over financial reporting as of February 3, 2007, is fairly stated, in allmaterial respects, based on the
COSO criteria. Also, in our opinion, American EagleOutfitters, Inc. maintained, in allmaterial respects,
effective internal controlover financial reporting as of February 3, 2007, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidatedbalance sheetsofAmerican Eagle Outfitters, Inc. as of February 3, 2007 and
January 28, 2006, and the related consolidated statements of operations, comprehensive income, stockholders’
equity, and cash flows for each of the three fiscal years in the period ended February 3, 2007 and our report dated
April 2, 2007 expressed an unqualified opinion thereon.
/s/ Ernst &Young LLP
Pittsburgh,Pennsylvania
April 2, 2007
AMERICAN EAGLE OUTFITTERS PAGE 61