Barnes and Noble 2004 Annual Report Download - page 50

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48 2004 Annual ReportBarnes & Noble, Inc.
MANAGEMENT’S RESPONSIBILITY FOR
CONSOLIDATED FINANCIAL STATEMENTS
The management of Barnes & Noble, Inc. is responsible
for the contents of the Consolidated Financial
Statements, which are prepared in conformity with
accounting principles generally accepted in the United
States of America. The Consolidated Financial
Statements necessarily include amounts based on
judgments and estimates. Financial information
elsewhere in the Annual Report is consistent with that in
the Consolidated Financial Statements.
The Company maintains a comprehensive accounting
system which includes controls designed to provide
reasonable assurance as to the integrity and reliability of
the financial records and the protection of assets. An
internal audit staff is employed to regularly test and
evaluate both internal accounting controls and operating
procedures, including compliance with the Company’s
statement of policy regarding ethical and lawful conduct.
The Audit Committee of the Board of Directors
composed of directors who are not members of
management, meets regularly with management, the
independent auditors and the internal auditors to ensure
that their respective responsibilities are properly
discharged. BDO Seidman, LLP and the Director of
Internal Audit have full and free independent access to
the Audit Committee. The role of BDO Seidman, LLP,
an independent registered public accounting firm, is to
provide an objective examination of the Consolidated
Financial Statements and the underlying transactions in
accordance with the standards of the Public Company
Accounting Oversight Board. The report of BDO
Seidman, LLP accompanies the Consolidated Financial
Statements.
MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
The management of Barnes & Noble, Inc. is responsible
for establishing and maintaining adequate internal
control over financial reporting, as such term is defined
in Exchange Act Rules 13a-15(f). Under the supervision
and with the participation of management, including the
principal executive officer and principal financial officer,
the Company conducted an evaluation of the
effectiveness of the Company’s internal control over
financial reporting based on the framework in Internal
Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway
Commission. Based on the Company’s evaluation under
the framework in Internal Control-Integrated
Framework, management concluded that the
Company's internal control over financial reporting was
effective as of January 29, 2005. Management’s
assessment of the effectiveness of the Company’s internal
control over financial reporting as of January 29, 2005
has been audited by BDO Seidman, LLP, an independent
registered public accounting firm, as stated in their
report which accompanies the Consolidated Financial
Statements.
MANAGEMENT’S CONSIDERATION OF THE RESTATEMENT
In arriving at its conclusion that the internal control over
financial reporting was effective as of January 29, 2005,
the Company’s management considered, among other
things, the control deficiency related to the
determination of lease terms, which resulted in the need
to restate previously issued financial statements as
disclosed in Note 1 to the Notes to Consolidated
Financial Statements. After reviewing and analyzing the
Securities and Exchange Commission’s Staff Accounting
Bulletin (SAB) No. 99, “Materiality,” Accounting
Principles Board Opinion No. 28, “Interim Financial
Reporting,” paragraph 29 and SAB Topic 5-F,
“Accounting Changes Not Retroactively Applied Due to
Immateriality,” and taking into consideration: (i) that
the restatement adjustments did not have a material
impact on the financial statements of prior interim or
annual periods individually or taken as a whole; (ii) that
the cumulative impact of the restatement adjustments on
stockholders’ equity was not material to the financial
statements of prior interim or annual periods; and (iii)
that the Company decided to restate its previously issued
financial statements solely because the cumulative
impact of the error, if recorded in the current period,
would have been material to the current year’s reported
net income, management concluded that the control
deficiency that resulted in the restatement of the prior
period financial statements was not in itself a material
weakness. Furthermore, management concluded that the
control deficiency that resulted in the restatement when
aggregated with other deficiencies did not constitute a
material weakness.
OTHER INFORMATION
The Company has included the Section 302
certifications of the Chief Executive Officer and the
Chief Financial Officer of the Company as Exhibits
31.1 and 31.2 to its Annual Report on Form 10-K for
fiscal 2004 filed with the Securities and Exchange
Commission, and the Company has submitted to the
New York Stock Exchange a certificate of the Chief
Executive Officer of the Company certifying that he is
not aware of any violation by the Company of
New York Stock Exchange corporate governance
listing standards.
2004 Annual Report ■Barnes & Noble, Inc.