Nautilus 2004 Annual Report Download - page 56

Table of Contents
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management has evaluated, under the supervision and with the participation of our President and Chief Executive Officer and Chief
Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule
13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, our President and Chief Executive
Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and
procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed,
summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our President and Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls
There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of Nautilus, Inc., together with its consolidated subsidiaries (the “Company”), is responsible for establishing and
maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed
under the supervision of the Company’s principal executive and principal financial officers to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with
accounting principles generally accepted in the United States of America.
As of the end of the Company’s 2004 fiscal year, management conducted an assessment of the effectiveness of the Company’s internal
control over financial reporting based on the framework established in Internal Control — Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management has determined that the
Company’s internal control over financial reporting as of December 31, 2004 is effective.
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004 has
been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing below, which
expresses unqualified opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2004.
Inherent Limitations on Effectiveness of Controls
The Company’s management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure
controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter
how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The
design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to
their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls
54