Pep Boys 2008 Annual Report Download - page 149

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ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A CONTROLS AND PROCEDURES
Disclosure Controls and Procedures The Company’s management evaluated, with the participation
of its principal executive officer and principal financial officer, the effectiveness of its disclosure
controls and procedures as of the end of the period covered by this report. Disclosure controls and
procedures mean the Company’s controls and other procedures that are designed to ensure that
information required to be disclosed by the Company in its reports that the Company files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be
disclosed by the Company in its reports that the Company communicated to its management, including
its principal executive officer and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure. The Company’s management recognizes that any controls and
procedures, no matter how well designed and operated, can only provide reasonable assurance of
achieving their objectives and management necessarily applies its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. Based upon the evaluation of the
Company’s disclosure controls and procedures, as of the end of the period covered by this report, the
Company’s principal executive officer and principal financial officer concluded that, as of such date, the
Company’s disclosure controls and procedures were effective at the reasonable assurance level.
During the second quarter of fiscal year 2007, the Company determined it had a material weakness
in its internal control over financial reporting related to preparation and review of the Company’s
supplemental guarantor information note and condensed consolidated statements of cash flows
presentation.
During the third quarter of fiscal year 2007, the Company discovered that the impairment charge
related to the store closure portion of its five-year strategic plan should be recorded in the third
quarter instead of the fourth quarter as initially concluded. This resulted in the delayed filing with the
SEC of the Company’s Quarterly Report on Form 10-Q. The Company considered this error in
conjunction with the material weakness described above and concluded that the Company continued to
have, in the aggregate, a material weakness in the financial close and reporting process as of the end of
third quarter of fiscal year 2007.
During the fourth quarter of fiscal year 2008, the Company completed the implementation of its
remediation plan which included the following changes: (i) hiring staff and providing additional
accounting research resources, (ii) improving process documentation and (iii) improving the review
process by more senior accounting personnel. As of January 31, 2009, the Company believes that its
ongoing efforts to hire and train additional staff are complete. Accordingly, the Company can provide
its constituents with reasonable assurance that the previously disclosed material weakness in the
financial close and reporting process has been remediated as of January 31, 2009.
Other than these changes, the Company made no other changes to its internal control over
financial reporting for the quarter ended January 31, 2009.
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