Tech Data 2013 Annual Report Download - page 104

Table of Contents
Report of Independent Registered Certified Public Accounting Firm
The Board of Directors and Shareholders of Tech Data Corporation
We have audited Tech Data Corporation and subsidiaries’ internal control over financial reporting as of January 31, 2013, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992
framework) (the COSO criteria). Tech Data Corporation and subsidiaries’
management is responsible for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on 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, assessing the risk that
a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, 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.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
The following material weaknesses have been identified and included in management’s assessment. Management has identified certain material
weaknesses in controls relating to an inadequate control environment in a United Kingdom subsidiary and two other European subsidiaries,
inadequate controls over manual journal entries in Europe and in two subsidiaries in Latin America, inadequate account reconciliation procedures in
Europe over certain aspects of vendor accounting and inadequate anti-fraud program controls and monitoring. We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Tech Data Corporation
and subsidiaries as of January 31, 2013 and 2012 (restated), and the related consolidated statements of income, comprehensive income,
shareholders’ equity and cash flows for the years ended January 31, 2013, January 31, 2012 (restated) and January 31, 2011 (restated). These
material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of those consolidated financial
statements, and this report does not affect our report dated February 5, 2014, which expressed an unqualified opinion on those financial statements.
As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’
s assessment of and conclusion
on the effectiveness of internal control over financial reporting did not include the internal controls of Specialist Distribution Group (SDG) Limited,
ETC Metrologie SARL, Best’Ware France SA, ETC Africa SAS and SDG BV (collectively “SDG”), which is included in the 2013 consolidated
financial statements of Tech Data Corporation and subsidiaries and constituted approximately 13% and 19% of total and net assets, respectively, as
of January 31, 2013 and approximately 2.4% and 0% o f net sales and net income, respectively, for the year then ended. Our audit of internal
control over financial reporting of Tech Data Corporation and subsidiaries also did not include an evaluation of the internal control over financial
reporting of SDG.
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