Pier 1 2007 Annual Report Download - page 76

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining a system of internal control over financial
reporting designed to provide reasonable assurance that transactions are executed in accordance with
management authorization and that such transactions are properly recorded and reported in the financial
statements, and that records are maintained so as to permit preparation of the financial statements in
accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Management has assessed the
effectiveness of the Company’s internal control over financial reporting utilizing the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated
Framework. Management concluded that based on its assessment, Pier 1 Imports, Inc.’s internal control over
financial reporting was effective as of March 3, 2007. Management’s assessment of the effectiveness of the
Company’s internal control over financial reporting as of March 3, 2007 has been audited by Ernst & Young
LLP, an independent registered public accounting firm, as stated in their report which is included in this
Annual Report on Form 10-K.
During the second quarter of fiscal 2007, the Company implemented a new general ledger accounting
system. The Company followed an information systems implementation process that required significant pre-
implementation planning, design and testing, and post-implementation monitoring. Based on this process and
the Company’s observations, the Company does not believe that the implementation of this system had a
material effect on the internal control over financial reporting for the second quarter and that it is not likely to
materially affect the internal control over financial reporting for future quarters. There has been no other
change in the Company’s internal control over financial reporting during the period covered by this report that
has materially affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting.
/s/ Alexander W. Smith
Alexander W. Smith
President and
Chief Executive Officer
/s/ Charles H. Turner
Charles H. Turner
Executive Vice President and
Chief Financial Officer
74