Costco 2005 Annual Report Download - page 35

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Costco Wholesale Corporation:
We have audited the accompanying consolidated balance sheets of Costco Wholesale Corporation and sub-
sidiaries as of August 28, 2005 and August 29, 2004 and the related consolidated statements of income, stock-
holders’ equity and comprehensive income and cash flows for the 52 weeks ended August 28, 2005, August 29,
2004, and August 31, 2003. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits 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 the consolidated financial statements are free of material misstatement. An audit includes examin-
ing, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Costco Wholesale Corporation and subsidiaries as of August 28, 2005 and
August 29, 2004, and the results of their operations and their cash flows for the 52 weeks ended August 28,
2005, August 29, 2004, and August 31, 2003, in conformity with U.S. generally accepted accounting principles.
Effective February 16, 2004, the Company adopted Emerging Issues Task Force Issue No. 03-10,
“Application of Issue No. 02-16 by Resellers to Sales Incentives Offered to Consumers by Manufacturers.”
Additionally, during the fiscal year ended August 31, 2003, the Company adopted Emerging Issues Task Force
Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a
Vendor,” based on the specific transition guidance.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of the Company’s internal control over financial reporting as of August 28,
2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Spon-
soring Organizations of the Treadway Commission (COSO), and our report dated November 9, 2005 expressed
an unqualified opinion on management’s assessment of, and the effective operation of, internal control over
financial reporting. Our report refers to the Company’s change in method of accounting for cash consideration
received from a vendor to conform to the requirements of Emerging Issues Task Force No. 03-10, effective
February 16, 2004 and Issue No. 02-16 effective during the year ended August 31, 2003.
Seattle, Washington
November 9, 2005
34