Nutrisystem 2011 Annual Report Download - page 43

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A.CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a
company’s controls and other procedures that are designed to ensure that information required to be disclosed in
the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported, within the time periods specified in the Securities and Exchange Commission’s rules and
forms. Based on the evaluation of the effectiveness of our disclosure controls and procedures by our
management, with the participation of our Chief Executive Officer and our Chief Financial Officer, as of the end
of the period covered by this report, our Chief Executive Officer and our Chief Financial Officer have concluded
that our disclosure controls and procedures at the end of the period covered by this report were effective to
ensure that information required to be disclosed in the reports that we file or submit under the Securities
Exchange Act of 1934 is (i) recorded, processed, summarized and reported, within the time periods specified in
the Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding
disclosure.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over the Company’s
financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of the Company’s financial reporting and the preparation of consolidated financial
statements for external purposes in accordance with generally accepted accounting principles. Internal control
over financial reporting includes policies and procedures that: (i) pertain to maintaining records that, in
reasonable 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 for preparation of the Company’s
financial statements in accordance with generally accepted accounting principles and that the receipts and
expenditures of the Company are being made in accordance with management and board of director
authorization; and (iii) provide reasonable assurance that unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on its financial statements would be prevented or detected on
a timely basis.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. 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.
There was no change in our internal control over financial reporting that occurred during the most recent
fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.
Management evaluated the effectiveness of the Company’s internal control over financial reporting based
on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”). Based upon that evaluation, management concluded that
the Company’s internal control over financial reporting was effective as of December 31, 2011.
The Company’s independent registered public accounting firm, KPMG LLP, has audited the Company’s
internal control over financial reporting as of December 31, 2011. Their report on the effectiveness of the
Company’s internal control over financial reporting appears on page 40.
39