Logitech 2014 Annual Report Download - page 239

Emphasis of Matter
As discussed in Note 2 to the consolidated financial statements, the Company has restated its 2011, and 2012,
and revised its 2013 consolidated financial statements. Our opinion is not qualified in respect of this matter.
Report on other legal requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA)
and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our
independence for the year ended 31 March 2014. However, subsequent to 31 March 2014, we provided certain
services which we now believe will impact our independence from August 2014 onwards; as a consequence, we will
not stand for re-election as statutory auditors for the financial year ending 31 March 2015.
During our audit, performed in accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing
Standard 890, we noted that an internal control system for the preparation of consolidated financial statements
according to the instructions of the Board of Directors was not designed in all material respects regarding the
following matters:
• The Company did not implement an effective control environment as former finance management
exercised bad judgment and failed to provide effective oversight, which resulted in ineffective information
and communication, whereby certain of the Company’s finance personnel did not adequately document
and communicate accounting issues across the organization, including to the Company’s statutory
auditor. Additionally, there was an insufficient complement of personnel with appropriate accounting
knowledge, experience and competence, resulting in incorrect conclusions in the application of generally
accepted accounting principles.
• The Company did not design effective controls related to: a) developing an appropriate methodology
to accrue the costs of product warranties given to end customers, including an on-going review of the
assumptions within the methodology to determine the completeness and accuracy of the warranty
accrual; and b) the consideration of all relevant information and documentation of the underlying
assumptions in the Company’s assessment of the valuation of finished goods, work in process and
components inventory, including non-cancelable orders for such inventory, related to Company’s now
discontinued Revue product.
• The Company did not design effective controls over the review of supporting information to determine
the completeness and accuracy of the consolidated statement of cash flows, the consolidated statement
of comprehensive income (loss) and disclosures in the notes to the consolidated financial statements.
In our opinion, except for the matters described in the preceding paragraph, an internal control system exists
which has been designed for the preparation of consolidated financial statements according to the instructions of
the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
PricewaterhouseCoopers SA
Michael Foley Filippos Mintiloglitis
Audit expert Audit expert
Auditor in charge
Lausanne, 17 November 2014
ANNUAl REPORT
223