Sally Beauty Supply 2007 Annual Report Download - page 72

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Background. Attached as exhibits to this Form 10-K are certifications of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), which are
required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This "Controls and Procedures" section
includes information concerning the controls and controls evaluation referred to in the certifications. Part II, Item 8—Financial Statements and Supplementary
Data of this Annual Report on Form 10-K sets forth the attestation report of KPMG LLP, our independent registered public accounting firm, regarding its audit
of our internal control over financial reporting and of management's assessment of internal control over financial reporting set forth below in this section. This
section should be read in conjunction with the certifications and the KPMG attestation report for a more complete understanding of the topics presented.
Controls Evaluation and Related CEO and CFO Certifications. Our management, with the participation of our CEO and CFO, conducted an evaluation of the
effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. The controls evaluation was
conducted by our Disclosure Committee, comprised of senior representatives from our finance, accounting, internal audit, and legal departments under the
supervision of our CEO and CFO.
Certifications of our CEO and our CFO, which are required in accordance with Rule 13a-14 of the Exchange Act, are attached as exhibits to this report. This
"Controls and Procedures" section includes the information concerning the controls evaluation referred to in the certifications, and it should be read in
conjunction with the certifications for a more complete understanding of the topics presented.
Limitations on the Effectiveness of Controls. We do not expect that our disclosure controls and procedures will prevent all errors and all fraud. A system of
controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are
met. Because of the limitations in all such systems, no evaluation can provide absolute assurance that all control issues and instances of fraud, if any, within the
Company have been detected. Furthermore, the design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how
unlikely. Because of these inherent limitations in a cost-effective system of controls and procedures, misstatements or omissions due to error or fraud may occur
and not be detected.
Scope of the Controls Evaluation. The evaluation of our disclosure controls and procedures included a review of their objectives and design, our
implementation of the controls and procedures and the effect of the controls and procedures on the information generated for use in this report. In the course of
the evaluation, we sought to identify whether we had any data errors, control problems or acts of fraud and to confirm that appropriate corrective action,
including process improvements, was being undertaken if needed. This type of evaluation is performed on a quarterly basis so that conclusions concerning the
effectiveness of our disclosure controls and procedures can be reported in our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K. Many of
the components of our disclosure controls and procedures are also evaluated by our internal audit department, our legal department and by personnel in our
finance organization. The overall goals of these various evaluation activities are to monitor our disclosure controls and procedures on an ongoing basis, and to
maintain them as dynamic systems that change as conditions warrant.
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Source: Sally Beauty Holding, 10-K, November 29, 2007