Sunbeam 2007 Annual Report Download - page 120

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There have been no changes in or disagreements with accountants or financial disclosure matters during the
periods covered by the Annual Report on Form 10-K.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s management carried out an evaluation, under the supervision and with the participation of
the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of December 31, 2007, pursuant to
Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer and Chief
Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of
December 31, 2007.
Management’s Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal
control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America (“GAAP”). The Company’s internal control over
financial reporting includes those policies and procedures that:
• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of the Company; and
• 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.
As required by Section 404 of the Sarbanes-Oxley Act of 2002, management assessed the effectiveness of
the Company’s internal control over financial reporting as of December 31, 2007. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework .
Based on our assessment and the above criteria, management concluded that the Company maintained
effective internal control over financial reporting as of December 31, 2007
On August 8, 2007, the Company acquired all the outstanding shares K2, a publicly traded company. The
Company has excluded K2’s internal controls over financial reporting for fiscal year 2007 from its assessment of
and conclusion on the effectiveness of its internal controls over financial reporting. K2 constituted approximately
27% of the Company’s consolidated assets at December 31, 2007 and 14% of the Company’s net sales for the
year ended December 31, 2007.
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