Apple 2006 Annual Report Download - page 122

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•
Certifying stock administration and other controls for SOX Section 404 compliance in fiscal year 2005
The internal review and the independent investigation discovered no stock option grant after January 2003 that required accounting
adjustments.
In coming to the conclusion that the Company’s disclosure controls and procedures and the Company’
s internal control over financial reporting
were effective as of September 30, 2006, management considered, among other things, the impact of the restatement to the financial statements
and the effectiveness of the internal controls in this area as of the fiscal years ended 2006 and 2005. Management has concluded, therefore, that
control deficiencies resulting in the restatement of previously issued financial statements did not constitute a material weakness in disclosure
controls and procedures, or internal controls and procedures over financial reporting, as of September 30, 2006.
In addition to the significant improvements implemented between 2003 and 2005 discussed above, the Company will adopt other measures
identified by the Special Committee and management to enhance the oversight of the stock option granting and administration function and the
review and preparation of financial statements, including:
•
The Company will engage experienced General Counsel, increase the resources of the Corporate Legal Department, and review the
adequacy of its procedures and practices
•
The CFO will arrange for senior management to undertake professional training to enhance awareness and understanding of standards
and principles for accounting and financial reporting, particularly those relevant to stock options
•
The Company will review all current policies, practices, and controls related to the granting of stock options and provide education and
training to those who implement those policies and processes, as needed
•
The Company will establish improved procedures for regular communication among the General Counsel, the CFO, and stock
administrators to improve monitoring of all Company practices with regard to stock option grants, including formal written
confirmation that all grant dates correspond precisely with the dates authorized
•
The Company will also establish improved procedures for the review of the preparation and presentation of financial statements by
senior management
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive
officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act) were effective as of September 30, 2006 to ensure that
information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed,
summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated
and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure.
121