Napa Auto Parts 2005 Annual Report Download - page 23

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REPORT OF MANAGEMENT
Genuine Parts Company
Management’s Responsibility for the Financial Statements
We have prepared the accompanying consolidated financial
statements and related information included herein for
the years ended December 31, 2005, 2004 and 2003. The
opinion of Ernst & Young LLP, the Company’s independent
registered public accounting firm, on those consolidated
financial statements is included herein. The primary
responsibility for the integrity of the financial information
included in this annual report rests with management.
Such information was prepared in accordance with gener-
ally accepted accounting principles appropriate in the
circumstances based on our best estimates and judgments
and giving due consideration to materiality.
Management’s Report on Internal Control
over Financial Reporting
The management of Genuine Parts Company and its
subsidiaries (the “Company”) is responsible for establishing
and maintaining adequate internal control over financial
reporting as defined in Rule 13a-15(f) under the Securities
Exchange Act of 1934.
The Company’sinternal control system was designed to
provide reasonable assurance to the Company’s management
and to the board of directors regarding the preparation
and fair presentation of the Company’s published financial
statements. The Company’s internal control over financial
reporting includes those policies and procedures that:
i. pertain to the maintenance of records that, in reason-
able detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
ii. provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial
statements in accordance with U.S. 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
iii. provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use
or disposition of the Company’sassets that could have
amaterial effect on the financial statements.
All internal control systems, no matter how well designed,
have inherent limitations and may not prevent or detect
misstatements. Therefore, even those systems determined
to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.
Also, 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.
The Company’s management, including our Chief Executive
Officer and Chief Financial Officer, assessed the effectiveness
of the Company’s internal control over financial reporting
as of December 31, 2005. In making this assessment, it
used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in
“Internal Control-Integrated Framework.” Based on this
assessment, management concluded that, as of December
31, 2005, the Company’s internal control over financial
reporting was effective.
Ernst & Young LLP has issued an audit report on our
assessment of the Company’s internal control over financial
reporting and the operating effectiveness of internal
control over financial reporting as of December 31, 2005.
This report appears on page 22.
Audit Committee Responsibility
The Audit Committee of Genuine Parts Company’s Board
of Directors is responsible for reviewing and monitoring
the Company’s financial reports and accounting practices
to ascertain that they are within acceptable limits of sound
practice in such matters. The membership of the Committee
consists of non-employee Directors. At periodic meetings,
the Audit Committee discusses audit and financial reporting
matters and the internal audit function with representatives
of financial management and with representatives from
Ernst & Young LLP.
JERRY W. NIX
Vice Chairman and Chief Financial Officer
March 1, 2006