Autodesk 2011 Annual Report Download - page 87

them for aligning their businesses with our strategy and business objectives. Changes in these relationships and
underlying programs could negatively impact their business and harm our business. In addition, the loss of or a
significant reduction in business with those distributors or resellers or the failure to achieve anticipated levels of
sell-through with any one of our major international distributors or large resellers could harm our business. In
particular, if one or more of such distributors or resellers were unable to meet their obligations with respect to
accounts payable to us, we could be forced to write off such accounts and may be required to delay the
recognition of revenue on future sales to these customers. These events could have a material adverse effect on
our financial results.
We are subject to legal proceedings and regulatory inquiries, and we may be named in additional legal
proceedings or become involved in regulatory inquiries in the future, all of which are costly, distracting to our
core business and could result in an unfavorable outcome, or a material adverse effect on our business,
financial condition, results of operations, cash flows or the trading price for our securities.
We are involved in legal proceedings and receive inquiries from regulatory agencies. As the global economy
has changed and our business has evolved, we have seen an increase in litigation activity. In addition, like many
other high technology companies, the number and frequency of inquiries from U.S. and foreign regulatory
agencies we have received regarding our business and our business practices, and the business practices of others
in our industry, have increased in recent years. In the event that we are involved in significant disputes or are the
subject of a formal action by a regulatory agency, we could be exposed to costly and time consuming legal
proceedings that could result in any number of outcomes. While outcomes of such actions vary, any claims or
regulatory actions initiated by or against us, whether successful or not, could result in expensive costs of defense,
costly damage awards, injunctive relief, increased costs of business, fines or orders to change certain business
practices, significant dedication of management time, diversion of significant operational resources, or otherwise
harm our business. In any of these cases, our financial results could be negatively impacted.
A breach of security in our products or computer systems may compromise the integrity of our products, harm
our reputation, create additional liability and adversely impact our financial results.
We make significant efforts to maintain the security and integrity of our product source code and computer
systems. There appears to be an increasing number of computer “hackers” developing and deploying a variety of
destructive software programs (such as viruses, worms, and the like) that could attack our products and computer
systems. Despite significant efforts to create security barriers to such programs, it is virtually impossible for us to
entirely mitigate this risk. Like all software products, our software is vulnerable to such attacks. The impact of
such an attack could disrupt the proper functioning of our software products, cause errors in the output of our
customers’ work, allow unauthorized access to sensitive, proprietary or confidential information of ours or our
customers and other destructive outcomes. If this were to occur, our reputation may suffer, customers may stop
buying our products, we could face lawsuits and potential liability and our financial performance could be
negatively impacted.
While we believe we currently have adequate internal control over financial reporting, we are required to
evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002
and any adverse results from such evaluation could result in a loss of investor confidence in our financial
reports and have an adverse effect on our stock price.
Pursuant to Section 404, we are required to furnish a report by our management on our internal control over
financial reporting. The report contains, among other matters, an assessment of the effectiveness of our internal
control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our
internal control over financial reporting is effective. This assessment must include disclosure of any material
weaknesses in our internal control over financial reporting identified by management.
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