THQ 2006 Annual Report Download - page 85

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Item 9.Changes in and Disagreements withAccountants onAccounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
(a) Definition and limitations of disclosure controls. Our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) are controls and other procedures that are designed to ensure that information required to be
disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms.Disclosure
controls and procedures are also designed to ensure that such information is accumulated and
communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure. Our management evaluates these
controls and procedures on an ongoing basis.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures.
These limitations include the possibility of human error, the circumvention or overriding of the controls
and procedures and reasonable resource constraints. In addition, because we have designed our system of
controls based on certain assumptions, which we believe are reasonable, about the likelihood of future
events, our system of controls may not achieve its desired purpose under all possible future conditions.
Accordingly, our disclosure controls and procedures provide reasonable assurance, but not absolute
assurance, of achieving their objectives.
(b) Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Chief Financial
Officer, after evaluating the effectiveness of our disclosure controls and procedures, believe that as of the
end of the period covered by this report, our disclosure controls and procedures were effective in providing
the requisite reasonable assurance that material information required to be disclosed in the reports that we
file or submit under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.
Deloitte & Touche LLP, the registered public accounting firm that audited the financial statements
included in this Annual Report on Form 10-K, hasissued an audit report on management’s assessment of
our internal control over financial reporting.
(c) Changes in internal control over financial reporting. In the fourth quarter of fiscal 2006, we implemented
certain components of a new system for project management and project costing (the “Project
Management System”) that enhance our ability to track and allocate the overall costs related to the
development of our video games. This change materially affected our internal control over financial
reporting. The Project Management System is a process improvement initiative intended to strengthen the
overall design and operating effectiveness of our financial reporting controls and is not in response to an
identified internal control deficiency. Other than the Project Management System implementation, there
were were no changes in our internal control over financial reporting that occurred during our last fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting. We have continued to implement additional components of the Project Management
System that are reasonably likely to have a material affect on our internal control over financial reporting
in the first quarter of fiscal 2007.
Item 9B. Other Information
None.