Stamps.com 2004 Annual Report Download - page 31

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Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Stamps.com Inc.
We have audited management’ s assessment, included in the accompanying Management’ s report on
internal control over financial reporting, that Stamps.com Inc. maintained effective internal control over financial
reporting as of December 31, 2004, based on criteria established in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Stamps.com
Inc.’ s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an
opinion on management’ s assessment and an opinion on the effectiveness of the company’ s internal control over
financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, evaluating management’ s
assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.
A company’ s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’ s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’ s
assets that could have a material effect on the financial statements.
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.
In our opinion, management’ s assessment that Stamps.com Inc. maintained effective internal control over
financial reporting as of December 31, 2004 is fairly stated, in all material respects, based on the COSO criteria.
Also, in our opinion, Stamps.com Inc. maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2004, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the balance sheets of Stamps.com Inc. as of December 31, 2004 and 2003, and the related
statements of operations, stockholders’ equity and comprehensive loss, and cash flows for each of the three years in
the period ended December 31, 2004 of Stamps.com Inc. and our report dated February 24, 2005 expressed an
unqualified opinion thereon.
/s/Ernst & Young LLP
Los Angeles, California
February 24, 2005