Callaway 2003 Annual Report Download - page 77

74 CALLAWAY GOLF COMPANY
disclosure of the reclassification of royalty income pertaining
to 2001 included (i) agreeing the previously reported net sales
and selling expenses to the previously issued financial
statements and the adjustments to reported net sales and
selling expenses representing royalty income and royalty-
related expenses recognized in those periods to underlying
records obtained from management; (ii) agreeing the
amounts of net sales, selling expenses, royalty income and
royalty-related expenses to the Company’s underlying records
obtained from management; and (iii) testing the mathematical
accuracy of net sales, selling expenses and other income as
adjusted for the reclassifications described above to the
similarly reported amounts.
In our opinion, the disclosures for 2001 in Notes 2, 6 and 15
and related reclassifications, as described above, are appropriate.
However, we were not engaged to audit, review, or apply any
procedures to the 2001 financial statements of the Company
other than with respect to such disclosures and, accordingly,
we do not express an opinion or any other form of assurance
on the 2001 financial statements taken as a whole.
As discussed in Note 6 to the consolidated financial statements,
in 2002 the Company changed its method of accounting for
goodwill and intangible assets.
Costa Mesa, California
March 10, 2004
Report of Independant
Public Accountants
To the Board of Directors and Shareholders
of Callaway Golf Company:
We have audited the accompanying consolidated balance sheet
of Callaway Golf Company (a Delaware corporation) and
Subsidiaries as of December 31, 2001, and the related consolidated
statements of operations, shareholders’ equity, and cash flows
for the year ended December 31, 2001. These financial statements
are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Callaway
Golf Company and Subsidiaries as of December 31, 2001, and
the results of their operations and their cash flows for the year
ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States.
/s/ ARTHUR ANDERSEN LLP
San Diego, California January 15, 2002
(except with respect to the matter discussed in Note 17, as to
which the date is February 11, 2002)
THE FOLLOWING AUDIT REPORT OF ARTHUR ANDERSEN
LLP (“ARTHUR ANDERSEN”) IS A COPY OF THE ORIGINAL
AUDIT REPORT DATED JANUARY 15, 2002, PREVIOUSLY
ISSUED BY ARTHUR ANDERSEN IN CONNECTION WITH THE
AUDIT OF THE COMPANY’S CONSOLIDATED FINANCIAL
STATEMENTS INCLUDED IN THE COMPANY’S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 2001. THIS AUDIT REPORT HAS NOT BEEN RE-ISSUED
BY ARTHUR ANDERSEN AS THEY HAVE CEASED OPERA-
TIONS. WE ARE INCLUDING THIS COPY OF THE ARTHUR
ANDERSEN AUDIT REPORT PURSUANT TO RULE 2-02(e) OF
REGULATION S-X UNDER THE SECURITIES ACT OF 1933.