World Fuel Services 2004 Annual Report Download - page 43

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2) As of December 31, 2004, the Company did not maintain effective controls over the accounting and financial reporting
of its inventory derivative program. Specifically, the Company did not maintain effective controls to ensure the accuracy and
presentation and disclosure of inventory derivative instruments. This control deficiency resulted in the restatement of the
interim financial statements for the four quarters in the year ended December 31, 2003, the interim financial statements for the
first three quarters in the year ended December 31, 2004, and an adjustment to the fourth quarter 2004 financial statements due
to the incorrect accounting for inventory derivative instruments. Additionally, this control deficiency could result in a
misstatement of inventory derivative instruments that would result in a material misstatement to the annual or interim financial
statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency
constitutes a material weakness.
3) As of December 31, 2004, the Company did not maintain effective controls over the presentation in the statement of
cash flows of borrowings and repayments under the Company’ s revolving credit facility. Specifically, the Company did not
present such borrowings and payments on a gross basis. This control deficiency resulted in the restatement of the consolidated
financial statements for the years ended December 31, 2004 and 2003 and the nine months ended December 31, 2002,
including interim financial statements for 2004 and 2003. Additionally, this control deficiency could result in a misstatement
of the borrowings and repayments under the Company’ s revolving credit facility in the statement of cash flows that would
result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
Accordingly, management has determined that this control deficiency constitutes a material weakness.
Because of these material weaknesses, management has concluded that the Company did not maintain effective internal
control over financial reporting as of December 31, 2004, based on criteria in Internal Control – Integrated Framework.
Management had previously concluded that the Company did not maintain effective internal control over financial
reporting because of the existence of the material weaknesses described in 1) and 2) above. In connection with the restatement
of the Company’ s consolidated financial statements described in Note 2b) to the consolidated financial statements,
management has determined that the material weakness described in 3) above also existed as of December 31, 2004.
Accordingly, management has restated this report.
Management's assessment of the effectiveness of the Company's internal control over financial reporting as of December
31, 2004 has been audited by PricewaterhouseCoopers LLP, an independent registered certified public accounting firm, as
stated in their report appearing on pages 35 and 37 of this 2004 Annual Report.
Item 9B. Other Information
None.
Page 31 of 72