Oracle 2011 Annual Report Download - page 80

sought to confirm that appropriate corrective actions, including process improvements, were being undertaken.
This type of evaluation is performed on a quarterly basis so that the conclusions of management, including our
Chief Executive Officer and Chief Financial Officer, concerning the effectiveness of the disclosure controls can
be reported in our periodic reports on Form 10-Q and Form 10-K. Many of the components of our disclosure
controls are also evaluated on an ongoing basis by both our internal audit and finance organizations. The overall
goals of these various evaluation activities are to monitor our disclosure controls and to modify them as
necessary. We intend to maintain our disclosure controls as dynamic processes and procedures that we adjust as
circumstances merit.
Based on our management’s evaluation (with the participation of our Chief Executive Officer and our Chief
Financial Officer), as of the end of the period covered by this report, our Chief Executive Officer and our Chief
Financial Officer have concluded that our disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and
with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we
conducted an evaluation of the effectiveness of our internal control over financial reporting as of May 31, 2011
based on the guidelines established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Our internal control over financial reporting
includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external reporting purposes in accordance with U.S. generally
accepted accounting principles.
Based on the results of our evaluation, our management concluded that our internal control over financial
reporting was effective as of May 31, 2011. We reviewed the results of management’s assessment with our
Finance and Audit Committee.
The effectiveness of our internal control over financial reporting as of May 31, 2011 has been audited by Ernst &
Young LLP, an independent registered public accounting firm, as stated in their report which is included in Part
IV, Item 15 of this Annual Report.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the
evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure
controls and procedures and internal control over financial reporting are designed to provide reasonable
assurance of achieving their objectives and are effective at the reasonable assurance level. However, our
management does not expect that our disclosure controls and procedures or our internal control over financial
reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the
design of a control system must reflect the fact that there are resource constraints, and the benefits of controls
must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been
detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more people or by management override of the controls.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential
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