Autodesk 2012 Annual Report Download - page 88

expensive costs of defense, costly damage awards, injunctive relief, increased costs of business, fines or orders to change
certain business practices, significant dedication of management time, diversion of significant operational resources, or
otherwise harm our business. In any of these cases, our financial results could be negatively impacted.
A breach of security in our products or computer systems may compromise the integrity of our products, harm our reputation,
create additional liability and adversely impact our financial results.
We make significant efforts to maintain the security and integrity of our product source code and computer systems.
There appears to be an increasing number of computer “hackers” developing and deploying a variety of destructive software
programs (such as viruses, worms, and the like) that could attack our products and computer systems. Despite significant
efforts to create security barriers to such programs, it is virtually impossible for us to entirely mitigate this risk. Like all
software products, our software is vulnerable to such attacks. The impact of such an attack could disrupt the proper functioning
of our software products, cause errors in the output of our customers' work, allow unauthorized access to sensitive, proprietary
or confidential information of ours or our customers and other destructive outcomes. If this were to occur, our reputation may
suffer, customers may stop buying our products, we could face lawsuits and potential liability and our financial performance
could be negatively impacted.
While we believe we currently have adequate internal control over financial reporting, we are required to evaluate our internal
control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 and any adverse results from such
evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.
Pursuant to Section 404, we are required to furnish a report by our management on our internal control over financial
reporting. The report contains, among other matters, an assessment of the effectiveness of our internal control over financial
reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting
is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting
identified by management.
While we have determined that our internal control over financial reporting was effective as of January 31, 2012, as
indicated in our Management Report on Internal Control over Financial Reporting, included in this Annual Report on Form
we must continue to monitor and assess our internal control over financial reporting. If our management identifies one or
more material weaknesses in our internal control over financial reporting and such weakness remains uncorrected at fiscal year-
end, we will be unable to assert such internal control is effective at fiscal year-end. If we are unable to assert that our internal
control over financial reporting is effective at fiscal year-end (or if our independent registered public accounting firm is unable
to express an opinion on the effectiveness of our internal controls or concludes that we have a material weakness in our internal
controls), we could lose investor confidence in the accuracy and completeness of our financial reports, which would likely have
an adverse effect on our business and stock price.
In preparing our financial statements we make certain assumptions, judgments and estimates that affect amounts reported in
our consolidated financial statements, which, if not accurate, may significantly impact our financial results.
We make assumptions, judgments and estimates for a number of items, including the fair value of financial instruments,
goodwill, long-lived assets and other intangible assets, the realizability of deferred tax assets and the fair value of stock awards.
We also make assumptions, judgments and estimates in determining the accruals for employee related liabilities including
commissions, bonuses, and sabbaticals; and in determining the accruals for uncertain tax positions, partner incentive programs,
product returns reserves, allowances for doubtful accounts, asset retirement obligations and legal contingencies. These
assumptions, judgments and estimates are drawn from historical experience and various other factors that we believe are
reasonable under the circumstances as of the date of the consolidated financial statements. Actual results could differ materially
from our estimates, and such differences could significantly impact our financial results.
Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results
of operations.
Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or
varying interpretations of current accounting pronouncements or taxation practice could have a significant adverse effect on our
results of operations or the manner in which we conduct our business. Further, such changes could potentially affect our
reporting of transactions completed before such changes are effective.
For example, the U.S.-based Financial Accounting Standards Board (“FASB”) is currently working together with the
International Accounting Standards Board (“IASB”) on several projects to further align accounting principles and facilitate
more comparable financial reporting between companies who are required to follow U.S. Generally Accepted Accounting
Principles (“GAAP”) under SEC regulations and those who are required to follow IFRS outside of the U.S. These efforts by the
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