Build-A-Bear Workshop 2014 Annual Report Download - page 42

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-eective 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 Ocer and Chief President Bear and the Chief
Financial Ocer, we conducted an evaluation of the eectiveness
of our internal control over financial reporting as of January 3, 2015.
Our management, with the participation of our Chief Executive
Ocer and Chief President Bear and our Chief Financial Ocer,
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 aected,
or are reasonably likely to materially aect, our internal control
over financial reporting. All internal control systems have inherent
limitations, including the possibility of circumvention and overriding
the control. Accordingly, even eective internal control can provide
only reasonable assurance as to the reliability of financial statement
preparation and presentation. Further, because of changes in
conditions, the eectiveness 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
(2013 framework). Based upon this evaluation, our management
has concluded that our internal control over financial reporting as of
January 3, 2015 is eective.
Our independent registered public accounting firm, Ernst & Young
LLP, has audited the eectiveness of our internal control over
financial reporting, as stated in its report which is included herein.
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred
during the fiscal 2014 fourth quarter that have materially aected,
or are reasonably likely to materially aect, our internal control over
financial reporting.
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Build-A-Bear Workshop, Inc.
We have audited Build-A-Bear Workshop, Inc. and subsidiaries
(collectively, the Company’s) internal control over financial reporting
as of January 3, 2015, based on criteria established in Internal Control
– Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the
COSO criteria). The Company's management is responsible for
maintaining eective internal control over financial reporting, and for
its assessment of the eectiveness of internal control over financial
reporting included in the accompanying Management’s Report on
Internal Control over Financial Reporting. 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 eective internal control over
financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing
and evaluating the design and operating eectiveness of internal
control based on the assessed risk, and performing such other
procedures as we considered 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 regarding 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 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 eect
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 eectiveness 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
procedures may deteriorate.
30 BUILD-A-BEAR WORKSHOP, INC. 2014 ANNUAL REPORT