Napa Auto Parts 2006 Annual Report Download - page 26

24
Genuine Parts Company
Management’s Responsibility for the Financial Statements
We have prepared the accompanying consolidated nancial state-
ments and related information included herein for the years ended
December 31, 2006, 2005 and 2004. The opinion of Ernst & Young
LLP, the Company’s independent registered public accounting rm,
on those consolidated nancial statements is included herein. The
primary responsibility for the integrity of the nancial information
included in this annual report rests with management. Such informa-
tion was prepared in accordance with generally accepted accounting
principles appropriate in the circumstances based on our best esti-
mates and judgments and giving due consideration to materiality.
Management’s Report on Internal Control over Financial Reporting
The management of Genuine Parts Company and its subsidiaries
(the “Company”) is responsible for establishing and maintaining
adequate internal control over nancial reporting as dened in
Rule 13a-15(f) under the Securities Exchange Act of 1934.
The Company’s internal control system was designed to provide
reasonable assurance to the Company’s management and to the
board of directors regarding the preparation and fair presentation
of the Company’s published nancial statements. The Company’s
internal control over nancial reporting includes those policies and
procedures that:
i. pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reect the transactions and
dispositions of the assets of the Company;
ii. provide reasonable assurance that transactions are recorded
as necessary to permit preparation of nancial statements in
accordance with U.S. 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
iii. 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 nancial statements.
All internal control systems, no matter how well designed, have
inherent limitations and may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can pro-
vide only reasonable assurance with respect to nancial statement
preparation and presentation. 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.
The Company’s management, including our Chief Executive Ofcer and
Chief Financial Ofcer, assessed the effectiveness of the Company’s
internal control over nancial reporting as of December 31, 2006.
In making this assessment, it used the criteria set forth by the Com-
mittee of Sponsoring Organizations of the Treadway Commission
(COSO) in “Internal Control-Integrated Framework.” Based on this
assessment, management concluded that, as of December 31, 2006,
the Company’s internal control over nancial reporting was effective.
Ernst & Young LLP has issued an audit report on our assessment
of the Company’s internal control over nancial reporting and the
operating effectiveness of internal control over nancial reporting
as of December 31, 2006. This report appears on page 25.
Audit Committee Responsibility
The Audit Committee of Genuine Parts Company’s Board of Directors
is responsible for reviewing and monitoring the Company’s nancial
reports and accounting practices to ascertain that they are within
acceptable limits of sound practice in such matters. The membership
of the Committee consists of non-employee Directors. At periodic
meetings, the Audit Committee discusses audit and nancial reporting
matters and the internal audit function with representatives of nancial
management and with representatives from Ernst & Young LLP.
JERRY W. NIX
Vice Chairman and Chief Financial Ofcer
February 26, 2007
Report of Management