Build-A-Bear Workshop 2009 Annual Report Download - page 47

BUILD-A-BEAR WORKSHOP, INC. 2009 FORM 10-K
translation effect and does not materially impact our short-term
cash flows.
Although we enter into a significant amount of purchase
obligations outside of the U.S., these obligations are settled
primarily in U.S. dollars and, therefore, we believe we have
only minimal exposure at present to foreign currency
exchange risks for our purchase obligations. Historically, we
have not hedged our currency risk and do not currently
anticipate doing so in the future.
We do not engage in financial transactions for trading or
speculative purposes.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
The financial statements and schedules are listed under
Item 15(a) and filed as part of this Annual Report on
Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management, with the participation of our Chief
Executive Bear and Chief Operations and Financial Bear, has
evaluated the effectiveness of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), as of the end of the period
covered by this report. Our management, with the
participation of our Chief Executive Bear and Chief
Operations and Financial Bear, also conducted an evaluation
of our internal control over financial reporting to determine
whether any changes occurred during the period covered by
this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting. Based on this evaluation, our management,
including the Chief Executive Bear and Chief Operations and
Financial Bear, concluded that our disclosure controls and
procedures were effective as of January 2, 2010, the end
of the period covered by this Annual Report.
It should be noted that our management, including the
Chief Executive Bear and the Chief Operations and Financial
Bear, do not expect that our disclosure controls and
procedures or internal controls will prevent all error and all
fraud. A control system, no matter how well conceived or
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
controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or
by management override of the controls. The design of any
system of controls is based in part upon certain assumptions
about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated
goals under all potential future conditions; over time, controls
may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-
effective control system, misstatements due to error or fraud
may occur and not be detected.
MANAGEMENT’S 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 Securities Exchange
Act of 1934. Under the supervision and with the participation
of our management, including the Chief Executive Bear and
the Chief Operations and Financial Bear, we conducted an
evaluation of the effectiveness of our internal control over
financial reporting as of January 2, 2010. All internal control
systems have inherent limitations, including the possibility of
circumvention and overriding the control. Accordingly, even
effective internal control can provide only reasonable
assurance as to the reliability of financial statement
preparation and presentation. Further, because of changes
in conditions, the effectiveness of internal control may vary
over time.
In making its evaluation, our management used the
criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”) in
Internal Control-Integrated Framework. Based upon this
evaluation, our management has concluded that our internal
control over financial reporting as of January 2, 2010 is
effective.
Our independent registered public accounting firm,
KPMG LLP, has audited the effectiveness of our internal control
over financial reporting, as stated in its report which is
included herein.
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