Barnes and Noble 2010 Annual Report Download - page 68

Board of Directors and Stockholders
Barnes & Noble, Inc.
New York, New York
We have audited Barnes & Noble, Inc.’s internal control
over financial reporting as of May 1, 2010, based on criteria
established in Internal Control-Integrated Framework
issued by the Committee of Sponsoring Organizations of
the Treadway Commission (the COSO criteria). Barnes &
Noble, Inc.’s management is responsible for maintain-
ing effective internal control over financial reporting and
for its assessment of the effectiveness of internal control
over financial reporting, included in the accompanying
Management’s Report on Internal Control over Financial
Reporting appearing under Item 9A. Our responsibility is
to express an opinion on the company’s internal control
over financial reporting based on our audit.
We conducted our audit 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 control over financial reporting was main-
tained in all material respects. Our audit included obtaining
an understanding of internal control over financial report-
ing, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk. Our audit also
included performing such other procedures as we consid-
ered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a
process designed to provide reasonable assurance regard-
ing the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s
internal control over financial reporting includes those
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 transac-
tions 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 com-
pany; 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.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstate-
ments. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or
that the degree of compliance with the policies or proce-
dures may deteriorate.
As indicated in the accompanying Management’s Report
on Internal Control over Financial Reporting under Item
9A, management’s assessment of and conclusion on the
effectiveness of internal control over financial reporting
did not include the internal controls of Barnes & Noble
College Booksellers, LLC, which was acquired on September
30, 2009, and which is included in the consolidated bal-
ance sheet of Barnes & Noble, Inc. as of May 1, 2010 and the
related consolidated statements of operations, changes in
shareholders’ equity and cash flows for the fiscal year then
ended. Barnes & Noble College Booksellers, LLC consti-
tuted 4% of total assets as of May 1, 2010 and 14% of sales,
respectively, for the fiscal year then ended. Management did
not assess the effectiveness of internal control over finan-
cial reporting of Barnes & Noble College Booksellers, LLC
because of the timing of the acquisition which was completed
on September 30, 2009. Our audit of internal control over
financial reporting of Barnes & Noble, Inc. also did not
include an evaluation of the internal control over financial
reporting of Barnes & Noble College Booksellers, LLC.
In our opinion, Barnes & Noble, Inc. maintained, in all
material respects, effective internal control over financial
reporting as of May 1, 2010, based on the COSO criteria.
We also have audited, in accordance with the standards of
the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Barnes & Noble,
Inc. as of May 1, 2010, May 2, 2009 and January 31, 2009,
and the related consolidated statements of operations,
changes in shareholders’ equity, and cash flows for each of
the three fiscal years ended May 1, 2010 and the transition
period ended May 2, 2009 and our report dated June 30,
2010 expressed an unqualified opinion thereon.
BDO Seidman, LLP
New York, New York
June 30, 2010
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
66 Barnes & Noble, Inc.