Dell 2010 Annual Report Download - page 118

Table of Contents
As part of our settlement of an SEC investigation into certain disclosure, accounting and financial reporting matters described under the
caption "Legal Matters" in Note 11 of Notes to Consolidated Financial Statements included in "Part II — Item 8 — Financial Statements
and Supplementary Data," we consented on October 13, 2010 to perform the following undertakings related to our disclosure processes,
practices and controls:
• For a minimum period of three years, enhance our disclosure review committee ("DRC") processes by having qualified outside
securities counsel attend all Dell meetings and review all of our SEC periodic filings prior to filing.
• Retain an independent consultant not unacceptable to the SEC staff to review and evaluate our disclosure processes, practices and
controls and to recommend changes designed to improve those processes, practices and controls, and, within 90 days after issuance of
the independent consultant's report containing such review, evaluation and recommendations, which will be issued in March 2011,
adopt and implement all recommendations contained in the report.
• For a minimum period of three years, provide annual training reasonably designed to minimize the possibility of future violations of
the disclosure requirements of the federal securities laws, with a focus on disclosures required in management's discussion and
analysis of financial condition and results of operations, for (1) members of the Audit Committee of our Board of Directors;
(2) members of the DRC; (3) our senior officers; (4) our internal disclosure counsel; (5) personnel in our internal audit department
who perform assurance services; (6) all persons required to certify in our filings with the SEC that such filings make adequate
disclosure under federal securities laws; and (7) all other persons employed by us who have responsibility for the review of our
filings with the SEC.
We will be required to certify to the SEC staff that we have complied with the foregoing undertakings. We have initiated actions to
perform each of the undertakings.
Inherent Limitations in Internal Controls
Our system of controls is designed to provide reasonable, not absolute, assurance regarding the reliability and integrity of accounting and
financial reporting. Management does not expect that our disclosure controls and procedures or our internal control over financial
reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system will be met. These inherent limitations include the following:
• Judgments in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes.
• Controls can be circumvented by individuals, acting alone or in collusion with each other, or by management override.
• The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all potential future conditions.
• Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with
associated policies or procedures.
• The design of a control system must reflect the fact that resources are constrained, and the benefits of controls must be considered
relative to their costs.
ITEM 9B — OTHER INFORMATION
None.
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