Dell 2007 Annual Report Download - page 101

Table of Contents
– We centralized the development, oversight, and monitoring of accounting policies, and standardized processes in critical accounting
areas.
– We implemented new, and refreshed and reemphasized existing, global accounting and finance policies regarding the proper
maintenance of accrued liability and other balance sheet reserve accounts.
– We created a revenue recognition accounting resource function to coordinate complex revenue recognition matters and to provide
global oversight and guidance on the design of controls and processes to enhance and standardize revenue recognition accounting
procedures.
– We developed, implemented, and communicated processes and controls to ensure that appropriate account reconciliations are
performed, documented, and reviewed as part of standardized procedures.
– We improved 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.
• We extended 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.
• The internal audit organization and the Chief Accounting Officer enhanced their 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.
During the fourth quarter of Fiscal 2008, the remediation plan was fully implemented and operationalized. Our remediation activities
during that period included continued focus on all remediation efforts and further testing to ensure the effectiveness of new and existing
controls and procedures, as well as the following specific activities: continued GAAP training for additional accounting and finance
personnel; further standardization of processes in critical accounting areas; continued operationalization of the revenue recognition
accounting resource function; continued training and testing on account reconciliation processes and controls; and implementation of the
accounting code of conduct, with compliance certifications from all accounting personnel.
Our efforts to remediate the identified material weaknesses and to enhance our overall control environment have been regularly reviewed
with, and monitored by, our Audit Committee.
We believe the remediation measures described above have been successful in correcting and remediating the material weaknesses
previously identified and have further strengthened and enhanced our internal control over financial reporting. As noted above,
management is committed to maintaining a strong control environment, high ethical standards, and financial reporting integrity. In that
regard, management will continue to improve, strengthen, and enhance our internal control processes and will continue to diligently and
vigorously review our financial reporting controls and procedures. Furthermore, we have enhanced our control monitoring processes so
that we can better assess on an ongoing basis the continuing effectiveness of the remediation and other control enhancement measures we
have implemented. In addition, we are investing 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. Our goal is to
reduce the need for manual processes, subjective assumptions, and management discretion; reduce the opportunity for errors and
omissions; and decrease our reliance on manual controls to detect and correct accounting and financial reporting inaccuracies.
Inherent Limitations over Internal Controls
Our system of controls is designed to provide reasonable, not absolute, assurance regarding the reliability and integrity of accounting and
financial reporting. Management does not expect that our disclosure controls and procedures or our internal control over financial
reporting will prevent or detect all errors and all fraud. A control
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