Citrix 2006 Annual Report Download - page 55

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Citrix Systems, Inc.  Annual Report
Evaluation of Disclosure Controls and
Procedures
As of December 31, 2006, our management, with the
participation of our President and Chief Executive Officer
and our Senior Vice President and Chief Financial
Officer, evaluated the effectiveness of our disclosure
controls and procedures pursuant to Rule 13a-15(b)
promulgated under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). Based upon that
evaluation, the President and Chief Executive Officer
and the Senior Vice President and Chief Financial Officer
concluded that, as of December 31, 2006, our disclosure
controls and procedures were effective in ensuring that
material information required to be disclosed by us in
the reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and
Exchange Commission’s rules and forms, including
ensuring that such material information is accumulated and
communicated to our management, including the President
and Chief Executive Officer and the Senior Vice President
and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure.
Changes in Internal Control Over Financial
Reporting
We believe the control deficiencies that existed in prior
years related to our stock option granting practices have
been resolved and management has determined that
there were no material weaknesses in our internal control
over financial reporting as of December 31, 2006. In order
to further enhance our internal controls, management
recommended the following enhancements to our equity
compensation granting policies and procedures to the
Compensation Committee of the Board of Directors, all
of which were approved and implemented by us in the
second quarter of 2007:
• The adoption of a policy requiring that all equity
awards to executive officers and other employees
be granted and priced according to a pre-
determined, fixed schedule each year;
• Revisions and clarifications of the parameters of
the Compensation Committee’s delegation of
authority to our Chief Executive Officer and Chief
Financial Officer to make equity awards;
• Establishment of improved processes and
procedures for the documentation of corporate
actions approving the grant of stock options,
including the use of unanimous written consents;
and
• Improvements to our processes and procedures
with respect to the timing of recording and
processing equity awards.
Management’s Annual Report on Internal
Control Over Financial Reporting
Our management is responsible for establishing and
maintaining adequate internal control over financial
reporting as such term is defined in Exchange Act Rule
13a – 15(f). Our internal control system was designed to
provide reasonable assurance to our management and
the Board of Directors regarding the preparation and
fair presentation of published financial statements. All
internal control systems, no matter how well designed
have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable
assurance with respect to financial statement preparation
and presentation. Our management assessed the
effectiveness of our internal control over financial reporting
as of December 31, 2006. In making this assessment, our
management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission
(“COSO”) in Internal Control – Integrated Framework (the
COSO criteria). Based on our assessment we believe
that, as of December 31, 2006, our internal control over
financial reporting is effective based on those criteria. The
effectiveness of our internal control over financial reporting
as of December 31, 2006 has been audited by Ernst &
Young LLP, an independent registered public accounting
firm, as stated in their report which appears elsewhere in
this Annual Report.