CarMax 2002 Annual Report Download - page 100

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CIRCUIT CITY STORES, INC. ANNUAL REPORT 2002 98
MANAGEMENT’S REPORT
The Board of Directors and Stockholders of Circuit City Stores, Inc.:
The consolidated financial statements of Circuit City Stores,
Inc. and subsidiaries, as well as the financial statements of the
Circuit City Group and the CarMax Group, have been pre-
pared under the direction of management, which is responsible
for their integrity and objectivity. These financial statements
have been prepared in conformity with accounting principles
generally accepted in the United States of America, except for
the Circuit City Group, which has accounted for its interest in
the CarMax Group in a manner similar to the equity method of
accounting. Accounting principles generally accepted in the
United States of America, require that the CarMax Group be
consolidated with the Circuit City Group. However, manage-
ment feels the manner in which the Circuit City Group is pre-
sented more clearly indicates the performance of the Circuit
City business. The financial statements include amounts that
are the best estimates and judgments of management with con-
sideration given to materiality.
Management is responsible for maintaining an internal control
structure designed to provide reasonable assurance that the books
and records reflect the transactions of the Company and that the
Company’s established policies and procedures are carefully fol-
lowed. Because of inherent limitations in any system, there can be
no absolute assurance that errors or irregularities will not occur.
Nevertheless, management believes that the internal control struc-
ture provides reasonable assurance that assets are safeguarded and
that financial information is objective and reliable.
The Company’s and the Groups’ financial statements have
been audited by KPMG LLP, independent auditors. Their
Independent Auditors’ Reports, which are based on audits
made in accordance with auditing standards generally accepted
in the United States of America, express opinions as to the fair
presentation of the financial statements in conformity with
accounting principles generally accepted in the United States of
America. In performing their audits, KPMG LLP considers the
Company’s internal control structure to the extent it deems
necessary in order to issue its opinions on the Company’s and
the Groups’ financial statements.
The audit committee of the board of directors is composed
solely of outside directors. The committee meets periodically
with management, the internal auditors and the independent
auditors to assure each is properly discharging its responsibilities.
KPMG LLP and the internal auditors have full and free access to
meet privately with the audit committee to discuss accounting
controls, audit findings and financial reporting matters.
W. Alan McCollough
President and Chief Executive Officer
Michael T. Chalifoux
Executive Vice President, Chief Financial Officer
and Corporate Secretary
April 2, 2002