Costco 2013 Annual Report Download - page 41

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MANAGEMENT'S REPORTS
Management’s Report on the Consolidated Financial Statements
Costco’s management is responsible for the preparation, integrity and objectivity of the accompanying
consolidated financial statements and the related financial information. The consolidated financial statements
have been prepared in conformity with U.S. generally accepted accounting principles and necessarily include
certain amounts that are based on estimates and informed judgments. The Company’s management is also
responsible for the preparation of the related financial information included in this Annual Report on Form
10-K and its accuracy and consistency with the consolidated financial statements.
The consolidated financial statements have been audited by KPMG LLP, an independent registered public
accounting firm, who conducted their audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). The independent registered public accounting firm’s
responsibility is to express an opinion as to the fairness with which such consolidated financial statements
present our financial position, results of operations and cash flows in accordance with U.S. generally accepted
accounting principles.
Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, we performed an evaluation under
the supervision and with the participation of management, including our Chief Executive Officer and Chief
Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e)
under the Securities and Exchange Act of 1934 (the Exchange Act)). Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this
Annual Report, our disclosure controls and procedures are effective.
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or
15d-15(f) of the Exchange Act) during our most recently completed fiscal year that has materially affected
or is reasonably likely to materially affect our 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 defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting
is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. generally accepted accounting
principles and includes those policies and procedures that: (1) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets; (2) provide
reasonable assurance that our transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and that our receipts and
expenditures are being made only in accordance with appropriate authorizations; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our
assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can provide only reasonable
assurance with respect to financial statement preparation and presentation.
Under the supervision and with the participation of our management, we assessed the effectiveness of our
internal control over financial reporting as of September 1, 2013, using the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated