Audiovox 2006 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 2006 Audiovox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

As of the end of the period covered by this report, the Company carried out an evaluation, under
the supervision and with the participation of the Company’s management, including the Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its
disclosure controls and procedures pursuant to the Securities and Exchange Act Rule 13a-15. Based
upon this evaluation as of February 28, 2007, the Chief Executive Officer and Chief Financial Officer
concluded that the Company’s disclosure controls and procedures are effective and adequately
designed.
Management’s Report on Internal Control Over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal
control over financial reporting; as such term is defined in the Securities and Exchange Act Rules
13a-15(f) and 15d-15(f). The Company’s internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles
and includes those policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the assets of the Company;
• Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a material effect on
the financial statements.
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
compliance with the policies or procedures may deteriorate.
Management evaluated the effectiveness of the Company’s internal control over financial
reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework. Under the supervision and with the
participation of the Company’s management, including the Chief Executive Officer and Chief
Financial Officer, the Company conducted an evaluation of the effectiveness of its internal control
over financial reporting as of February 28, 2007. Based on that evaluation, management concluded
that the Company’s internal control over financial reporting was effective as of February 28, 2007
based on the COSO criteria.
The certifications of the Company’s Chief Executive Officer and Chief Financial Officer included
in Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K includes, in paragraph 4 of such
certifications, information concerning the Company’s disclosure controls and procedures and internal
control over financial reporting. Such certifications should be read in conjunction with the information
contained in this Item 9A. Controls and Procedures, for a more complete understanding of the
matters covered by such certifications.
Management’s assessment of the effectiveness of the Company’s internal control over financial
reporting as of February 28, 2007, has been audited by Grant Thornton LLP, an independent
registered public accounting firm who also audited the Company’s consolidated financial statements.
Grant Thornton LLP’s attestation report on management’s assessment of the Company’ s internal
control over financial reporting is included below.
34