Dell 2006 Annual Report Download - page 117

Table of Contents
• We will continue our efforts to establish or modify specific processes and controls to provide reasonable assurance with
respect to the accuracy and integrity of accounting entries and the appropriate documentation, review, and approval of
those entries. These efforts include:
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Centralization of the development, oversight, and monitoring of accounting policies and standardized processes in all critical accounting areas, including areas involving management judgment and discretion;
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Implementation and clarification of specific accounting and finance policies, applicable worldwide, regarding the establishment, increase, and release of accrued liability and other balance sheet reserve accounts;
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Creation of a revenue recognition accounting resource function to coordinate complex revenue recognition matters and to provide oversight and guidance on the design of controls and processes to enhance and standardize revenue
recognition accounting procedures;
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Improving the processes and procedures around the completion and review of quarterly management representation letters, in which our various business and finance leaders make full and complete representations concerning, and
assume accountability for, the accuracy and integrity of their submitted financial results;
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Extending the time between the end of a financial reporting period and the public release of financial and operating data with respect to that period, giving our accounting organization more time to appropriately process the close of the
accounting records and analyze the reported results prior to public announcement;
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Enhancing the development, communication, and monitoring of processes and controls to ensure that appropriate account reconciliations are performed, documented, and reviewed as part of standardized procedures; and
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Increasing the focus by the internal audit function and the Chief Accounting Officer on the review and monitoring of key accounting processes, including journal entries and supporting documentation, revenue recognition processes, account
reconciliations, and management representation letter controls and processes.
• We will implement company-wide training (led by the Chief Accounting Officer and other finance executives with
appropriate accounting expertise) to enhance awareness and understanding of standards and principles for accounting and
financial reporting. This training will include:
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Development and communication of an accounting code of conduct that will serve as a set of guiding principles emphasizing our commitment to accounting and financial reporting integrity, as well as transparency and robust and
complete communications with, and disclosures to, internal and external auditors;
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Comprehensive programs for all finance personnel globally (with initial focus on personnel directly responsible for accounting and financial reporting) covering all fundamental accounting and financial reporting matters, including
accounting policies, financial reporting requirements, income statement classification, revenue recognition, vendor
funding, accounting for reserves and accrued liabilities, and account reconciliation and documentation requirements; and
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Appropriate programs for other company personnel, including senior management, to emphasize the importance of accounting and financial reporting integrity.
• We will invest in the design and implementation of additional and enhanced information technology systems and user
applications commensurate with the complexity of our business and our financial reporting requirements. It is expected that
these investments will improve the reliability of our financial reporting by reducing the need for manual processes,
subjective assumptions, and management discretion; by reducing the opportunities for errors and omissions; and by
decreasing our reliance on manual controls to detect and correct accounting and financial reporting inaccuracies.
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