Ace Hardware 2005 Annual Report Download - page 41

16 ACE HARDWARE CORP. NEW FRONTIERS. NEW OPPORTUNITIES.
MANAGEMENT’S RESPONSIBILITY INDEPENDENT
FOR FINANCIAL STATEMENTS AUDITORS’ REPORT
The consolidated financial statements presented in this Annual
Report have been prepared with integrity and objectivity and
are the responsibility of the management of Ace Hardware
Corporation. These consolidated financial statements have been
prepared in conformity with U.S. generally accepted accounting
principles and properly reflect certain estimates and judgments
based upon the best available information.
The Company maintains a system of internal accounting controls,
which is supported by an internal audit program and is designed to
provide reasonable assurance, at an appropriate cost, that the
Company’s assets are safeguarded and transactions are properly
recorded. This system is continually reviewed and modified in
response to changing business conditions and operations and
as a result of recommendations by the internal and external
auditors. In addition, the Company has distributed to employees
its policies for conducting business affairs in a lawful and
ethical manner.
The consolidated financial statements of the Company have
been audited by KPMG LLP, independent auditors. Their
accompanying report is based upon an audit conducted in
accordance with auditing standards generally accepted in the
United States of America.
The Audit Committee of the Board of Directors meets periodically
with the independent auditors and with the Company’s internal
auditors, both privately and with management present, to review
accounting, auditing, internal control and financial reporting
matters. The Audit Committee retains the independent auditors
and regularly reviews the internal accounting controls, the
activities of the outside auditors and internal auditors and the
financial condition of the Company. Both the Company’s
independent auditors and the internal auditors have free access
to the Audit Committee.
February 16, 2006
Ray A. Griffith
President and
Chief Executive Officer
Arthur J. McGivern
Senior Vice President
General Counsel and Secretary
(Principal Financial Officer)
Ronald J. Knutson
Vice President, Finance
The Board of Directors
Ace Hardware Corporation:
We have audited the accompanying consolidated statements
of financial position of Ace Hardware Corporation and
subsidiaries (the Company) as of December 31, 2005 and
January 1, 2005, and the related consolidated statements of
earnings, comprehensive income and cash flows for each of the
fiscal years in the three-year period ended December 31, 2005.
These consolidated financial statements are the responsibility
of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based
on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion.
An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Ace Hardware Corporation and subsidiaries as of
December 31, 2005 and January 1, 2005, and the results of their
operations and their cash flows for each of the fiscal years in the
three-year period ended December 31, 2005 in conformity with
U.S. generally accepted accounting principles.
Chicago, Illinois
February 16, 2006