Audiovox 2010 Annual Report Download - page 43

Foreign Exchange Risk
We are subject to risk from changes in foreign exchange rates for our subsidiaries and marketable securities that use a foreign
currency as their functional currency and are translated into U.S. dollars. These changes result in cumulative translation adjustments,
which are included in accumulated other comprehensive income (loss). At February 28, 2010, we had translation exposure to various
foreign currencies with the most significant being the Euro, Thailand Baht, Malaysian Ringgit, Hong Kong Dollar, Mexican Peso,
Venezuelan Bolivar and Canadian Dollar. The potential loss resulting from a hypothetical 10% adverse change in quoted foreign
currency exchange rates, as of February 28, 2010 amounts to $2,856. Actual results may differ.
Item 8-Consolidated Financial Statements and Supplementary Data
The information required by this item begins on page 33 of this Annual Report on Form 10-K and is incorporated herein by
reference.
Item 9-Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not Applicable
Item 9A-Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Audiovox Corporation and subsidiaries (the “Company”) maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the reports that the Company files or submits under the Securities and Exchange
Act is recorded, processed, summarized, and reported within the time periods specified in accordance with the SEC’s rules and
regulations, and that such information is accumulated and communicated to the Company’s management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosures.
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, 2010 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, 2010 excluding the controls associated with its most recent acquisitions at Schwaiger and Invision. Based on that
evaluation, management concluded that the Company's internal control over financial reporting was effective as of February 28, 2010
based on the COSO criteria.
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠