Nautilus 2005 Annual Report Download - page 66

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Table of Contents
insufficient resources devoted to controls over analyzing and recording contingencies, material audit adjustments to the consolidated financial
statements were required. These control deficiencies, if unremediated, could result in the failure to prevent or detect a material misstatement of
net sales, cost of sales, inventory, and various contingencies in the annual or interim financial statements. Due to the misstatements which
resulted in the adjustment of the Company’s consolidated financial statements and the potential for additional misstatements from these
material weaknesses, there is more than a remote likelihood that a material misstatement of the financial statements would not be prevented or
detected. These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the
consolidated financial statements as of and for the year ended December 31, 2005, of the Company and this report does not affect our report on
such financial statements.
In our opinion, management’s assessment that the Company did not maintain effective internal control over financial reporting as of
December 31, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, because of the effect of the material
weaknesses described above on the achievement of the objectives of the control criteria, the Company has not maintained effective internal
control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated financial statements as of and for the period ended December 31, 2005, of the Company and our report dated March 16, 2006
expressed an unqualified opinion on those financial statements.
DELOITTE & TOUCHE LLP
Portland, Oregon
March 16, 2006
65