True Value 2007 Annual Report Download - page 33

12 | TRUE VALUE COMPANY
MANAGEMENT’S REPORT
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Although True Value is not an SEC registrant, True Value’s man-
agement has elected to assess the effectiveness of its internal
control over financial reporting as of December 29, 2007 and
report, based on that assessment, whether True Value’s internal
controls over financial reporting are effective.
True Value’s management is following the guidance under Sec-
tion 404 of The Sarbanes-Oxley Act of 2002, and as defined in
Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act
of 1934 that it is responsible for establishing and maintaining
adequate internal control over financial reporting. True Value’s
internal control over reporting is designed to provide reason-
able assurance regarding the reliability of True Value’s financial
reporting and the preparation of financial statements for exter-
nal purposes in accordance with generally accepted accounting
principles.
True Value’s internal control over financial reporting includes
those policies and procedures that: (i) pertain to the mainte-
nance of records that, in reasonable detail, accurately and fairly
reflect the acquisition, disposition and other transactions
regarding the assets of True Value, (ii) provide reasonable assur-
ance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expendi-
tures of True Value are being made only in accordance with
authorizations of management and directors of True Value; and
(iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of
True Value’s assets that could have a material effect on the finan-
cial statements.
Internal control over financial reporting, because of its inherent
limitations, 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 compli-
ance with the policies or procedures may deteriorate.
True Value’s management has assessed the effectiveness of its
internal control over financial reporting as of December 29,
2007. In making this assessment, True Value’s management used
the criteria established by the Committee of Sponsoring Orga-
nizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework. These criteria are in the areas of
control environment, risk assessment, control activities, infor-
mation and communication, and monitoring. True Value’s
management assessment included documenting, evaluating
and testing of the design and operating effectiveness of its
internal control over financial reporting. True Value’s manage-
ment reviewed the results of its assessment with the Audit
Committee of our Board of Directors.
True Value’s management, based on their assessment, has
concluded that, as of December 29, 2007, True Value’s internal
control over financial reporting was effective.
TRUE VALUE COMPANY
Lyle G. Heidemann David A. Shadduck
President and Senior Vice President and
Chief Executive Officer Chief Financial Officer
Date: March 5, 2008