Aarons 2006 Annual Report Download - page 42

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THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
AARON RENTS, INC.
We have audited the accompanying consolidated balance sheets
of Aaron Rents, Inc. and Subsidiaries as of December 31, 2006
and 2005, and the related consolidated statements of earnings,
shareholders’ equity, and cash flows for each of the three years
in the period ended December 31, 2006. These financial state-
ments are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial state-
ments are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant esti-
mates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits pro-
vide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Aaron Rents, Inc. and Subsidiaries at December 31,
2006 and 2005, and the consolidated results of their operations
and their cash flows for each of the three years in the period
ended December 31, 2006, in conformity with U.S. generally
accepted accounting principles.
As discussed in Note A and H in the consolidated financial
statements, in 2006 the Company changed its method of
accounting for share-based compensation as required by
Statement of Financial Accounting Standard No. 123(R),
Share Based Payments.
We also have audited, in accordance with the standards of
the Public Company Accounting Oversight Board (United States),
the effectiveness of Aaron Rents, Inc.’s internal control over
financial reporting as of December 31, 2006, based on criteria
established in Internal Control-Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 27, 2007 expressed
an unqualified opinion thereon.
Atlanta, Georgia
February 27, 2007
Report of Independent Registered Public Accounting Firm
Management Report on Internal Control
Over Financial Reporting
Management of Aaron Rents, Inc. (the “Company”) is responsible
for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Securities Exchange Act of 1934, as amended.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
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 com-
pliance with the policies or procedures may deteriorate. Internal
control over financial reporting cannot provide absolute assur-
ance of achieving financial reporting objectives because of its
inherent limitations. Internal control over financial reporting
is a process that involves human diligence and compliance and
is subject to lapses in judgment and breakdowns resulting from
human failures. Internal control over financial reporting also can
be circumvented by collusion or improper management override.
Because of such limitations, there is a risk that material mis-
statements may not be prevented or detected on a timely basis
by internal control over financial reporting. However, these
inherent limitations are known features of the financial reporting
process. Therefore, it is possible to design into the process safe-
guards to reduce, though not eliminate, the risk.
The Company’s management assessed the effectiveness of
the Company’s internal control over financial reporting as of
December 31, 2006. In making this assessment, the Company’s
management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO)
in Internal Control-Integrated Framework.
Based on our assessment, management believes that, as
of December 31, 2006, the Company’s internal control over
financial reporting is effective based on those criteria.
The Company’s independent registered public accounting firm
has issued an audit report on our assessment of the Company’s
internal control over financial reporting. This report appears on
the following page.
February 27, 2007