GameStop 2005 Annual Report Download - page 53

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accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
As described in Management’s Annual Report on Internal Control over Financial Reporting, management’s
assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the
internal control over financial reporting at Electronics Boutique Holdings Corp. (“EB”), which is included in the
fiscal 2005 consolidated financial statements of GameStop Corp. EB’s financial statements constituted total assets
and liabilities of approximately 60.0% and 65.7%, respectively, and revenues and operating earnings of approx-
imately 32.2% and 44.9%, respectively, of the related consolidated financial statement amounts as of and for the
52 week period ended January 28, 2006. Management did not assess the effectiveness of internal control over
financial reporting at EB because the Company acquired EB on October 8, 2005. Refer to Note 2 to the consolidated
financial statements for further discussion of the acquisition and its impact on the Company’s consolidated financial
statements. Our audit of internal control over financial reporting of GameStop Corp. did not include an evaluation of
the internal control over financial reporting of EB.
In our opinion, management’s assessment that GameStop Corp. maintained effective internal control over
financial reporting as of January 28, 2006, is fairly stated, in all material respects, based on criteria established in
Internal Control — Integrated Framework issued by the COSO. Also, in our opinion, GameStop Corp. maintained,
in all material respects, effective internal control over financial reporting as of January 28, 2006, based on the
criteria established in Internal Control — Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of GameStop Corp. as of January 28, 2006 and January 29, 2005
and the related consolidated statements of operations, stockholders’ equity, and cash flows for the 52 week periods
ended January 28, 2006, January 29, 2005, and January 31, 2004. We have also audited the schedule listed in
Item 15(a)(2) for this Form 10-K. Our report dated March 29, 2006 expressed an unqualified opinion on those
consolidated financial statements and schedule.
/s/ BDO SEIDMAN, LLP
BDO Seidman, LLP
Dallas, Texas
March 29, 2006
(c) Changes in Internal Controls Over Financial Reporting
EB operates on different information technology systems than the Company. The Company is currently
implementing its information technology systems and integrating its internal control processes at EB. Changes to
certain processes, information technology systems, and other components of internal controls resulting from the
acquisition of EB may occur and will be evaluated by management as such integration activities are implemented.
Other than the impact of the acquisition of EB, there was no change in the Company’s internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s
most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.
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