Supercuts 2006 Annual Report Download - page 65

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Management’s Statement of Responsibility for Financial Statements and
Report on Internal Control over Financial Reporting
Financial Statements
Management is responsible for preparation of the consolidated financial statements and other related financial information included in this
annual report on Form 10-K. The consolidated financial statements have been prepared in conformity with accounting principles generally
accepted in the United States of America, incorporating management’s reasonable estimates and judgments, where applicable.
Management
’s Report on Internal Control over Financial Reporting
This report is provided by management pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC rules promulgated
thereunder. Management, including the chief executive officer and chief financial officer, is responsible for establishing and maintaining
adequate internal control over financial reporting and for assessing effectiveness of internal control over financial reporting.
The 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 accounting principles generally
accepted in the United States of America. The Company’s internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of 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 to permit preparation of financial statements in
accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company
are being made only in accordance with authorizations of management and Directors of the Company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisitions, 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.
Management has excluded Artistic Enterprises, Chic Schools, Martin’
s School of Hair Design, School of Hair Design, Warwick Academy
of Beauty, and Wheatridge Beauty College (collectively “2006 Acquired Beauty Schools”) from its assessment of internal control over
financial reporting as of June 30, 2006 because the 2006 Acquired Beauty Schools were acquired by the Company in purchase business
combinations during fiscal year 2006. The 2006 Acquired Beauty Schools are wholly owned subsidiaries of Regis Corporation whose total
assets, total revenues and total operating income represent 2.2 percent of consolidated assets, 0.9 percent of the consolidated revenues and 0.4
percent of consolidated operating income as of and for the year ended June 30, 2006.
Management has assessed the Company’s internal control over financial reporting as of June 30, 2006, based on criteria established in
Internal Control
—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based
on the assessment of the Company’s internal control over financial reporting, management has concluded that, as of June 30, 2006, the
Company’s internal control over financial reporting was effective.
The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited management’s assessment of
the effectiveness of the Company’s internal control over financial reporting as of June 30, 2006, as stated in their report which follows in Item
8 of this Form 10-K.
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