Citrix 2005 Annual Report Download - page 37

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Page฀35
Controls฀and฀Procedures
EVALUATION฀OF฀DISCLOSURE฀CONTROLS฀AND฀PROCEDURES
As฀of฀December฀31,฀2005,฀the฀Company’s฀management,฀with฀the฀participation฀of฀the฀Company’s฀President฀and฀Chief฀Executive฀
Officer฀and฀the฀Company’s฀ Vice฀ President฀ and฀Chief฀ Financial฀Officer,฀evaluated฀the฀effectiveness฀of฀the฀ Company’s฀disclosure฀
controls฀and฀procedures฀pursuant฀to฀Rule฀13a-15(b)฀promulgated฀under฀the฀Securities฀Exchange฀Act฀of฀1934,฀as฀amended฀(the฀
“Exchange฀ Act”).฀ Based฀ upon฀ that฀ evaluation,฀ the฀ Company’s฀ President฀ and฀ Chief฀ Executive฀ Officer฀ and฀ the฀ Company’s฀ Vice฀
President฀and฀Chief฀Financial฀Officer฀concluded฀that,฀as฀of฀December฀31,฀2005,฀the฀Company’s฀disclosure฀controls฀and฀procedures฀
were฀effective฀in฀ensuring฀that฀material฀information฀required฀to฀be฀disclosed฀by฀the฀Company฀in฀the฀reports฀that฀it฀files฀or฀submits฀
under฀the฀Exchange฀Act฀is฀recorded,฀processed,฀summarized฀and฀reported฀within฀the฀time฀periods฀specified฀in฀the฀Securities฀and฀
Exchange฀Commission’s฀rules฀and฀forms,฀including฀ensuring฀that฀such฀material฀information฀is฀accumulated฀and฀communicated฀to฀
the฀Company’s฀management,฀including฀the฀Company’s฀President฀and฀Chief฀Executive฀Officer฀and฀the฀Company’s฀Vice฀President฀
and฀Chief฀Financial฀Officer,฀as฀appropriate฀to฀allow฀timely฀decisions฀regarding฀required฀disclosure.
CHANGES฀IN฀INTERNAL฀CONTROL฀OVER฀FINANCIAL฀REPORTING
During฀the฀ quarter฀ended฀ December฀ 31,฀ 2005,฀there฀ were฀no฀ changes฀ in฀our฀ internal฀ control฀over฀financial฀ reporting฀ that฀have฀
materially฀affected,฀or฀are฀reasonably฀likely฀to฀materially฀affect,฀our฀internal฀control฀over฀financial฀reporting฀except฀as฀described฀below.
During฀the฀ fourth฀ quarter฀ of฀ 2005,฀we฀continued฀ to฀ improve฀and฀enhance฀ our฀ financial฀ reporting฀systems฀by฀implementing฀ our฀
existing฀SAP฀system,฀our฀information฀system฀for฀enterprise฀resource฀planning,฀at฀our฀Online฀Services฀division.฀The฀implementation฀was฀
not฀made฀in฀response฀to฀any฀deficiency฀in฀our฀internal฀control฀over฀financial฀reporting;฀however,฀we฀believe฀that฀the฀implementation฀
has฀enhanced฀our฀system฀of฀internal฀control฀over฀financial฀reporting.
MANAGEMENT’S฀ANNUAL฀REPORT฀ON฀INTERNAL฀CONTROL฀OVER฀FINANCIAL฀REPORTING
Our฀management฀is฀responsible฀for฀establishing฀and฀maintaining฀adequate฀internal฀control฀over฀financial฀reporting฀as฀such฀term฀
is฀ defined฀ in฀ Exchange฀ Act฀ Rule฀ 13a-15(f).฀ Our฀ internal฀ control฀ system฀ was฀ designed฀ to฀ provide฀ reasonable฀ assurance฀ to฀ our฀
management฀and฀board฀of฀directors฀regarding฀the฀preparation฀and฀fair฀presentation฀of฀published฀financial฀statements.฀All฀internal฀
control฀systems,฀no฀matter฀how฀well฀designed฀have฀inherent฀limitations.฀Therefore,฀even฀those฀systems฀determined฀to฀be฀effective฀
can฀ provide฀ only฀ reasonable฀ assurance฀ with฀ respect฀ to฀ financial฀ statement฀ preparation฀ and฀ presentation.฀ Our฀ management฀
assessed฀the฀effectiveness฀of฀our฀internal฀control฀over฀financial฀reporting฀as฀of฀December฀31,฀2005.฀In฀making฀this฀assessment,฀our฀
management฀used฀the฀criteria฀set฀forth฀by฀the฀Committee฀of฀Sponsoring฀Organizations฀of฀the฀Treadway฀Commission฀(“COSO”)฀in฀
Internal฀Control—Integrated฀Framework฀(the฀COSO฀criteria).
We฀have฀excluded฀NetScaler,฀Inc.,฀or฀NetScaler,฀from฀our฀assessment฀of฀and฀conclusion฀on฀the฀effectiveness฀of฀internal฀control฀over฀
financial฀reporting฀as฀of฀December฀31,฀2005฀because฀it฀was฀acquired฀by฀us฀in฀a฀purchase฀business฀combination฀on฀August฀15,฀
2005.฀Total฀assets฀and฀net฀assets฀acquired฀(excluding฀$281.0฀million฀of฀goodwill฀and฀other฀intangible฀assets฀recorded฀in฀connection฀
with฀the฀acquisition)฀were฀both฀approximately฀2%฀of฀our฀consolidated฀total฀assets฀and฀consolidated฀net฀assets฀as฀of฀December฀31,฀
2005,฀and฀NetScaler’s฀net฀revenues฀for฀the฀period฀we฀owned฀it฀were฀approximately฀2%฀of฀our฀consolidated฀net฀revenues฀for฀the฀
year฀ ended฀ December฀ 31,฀ 2005.฀ NetScaler’s฀ net฀ loss,฀ for฀ the฀ period฀ we฀ owned฀ it,฀ reduced฀ our฀ consolidated฀ net฀ income฀ by฀
approximately฀7%฀for฀the฀year฀ended฀December฀31,฀2005.฀Based฀on฀our฀assessment฀we฀believe฀that,฀as฀of฀December฀31,฀2005,฀
our฀internal฀control฀over฀financial฀reporting฀is฀effective฀based฀on฀those฀criteria.฀Our฀management’s฀assessment฀of฀the฀effectiveness฀
or฀our฀internal฀control฀over฀financial฀reporting฀as฀of฀December฀31,฀2005฀has฀been฀audited฀by฀Ernst฀&฀Young฀LLP,฀an฀independent฀
registered฀public฀accounting฀firm,฀as฀stated฀in฀their฀report฀which฀appears฀below.