Dell 2006 Annual Report Download - page 114

Table of Contents
ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not applicable.
ITEM 9A — CONTROLS AND PROCEDURES
This Report includes the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 of
the Securities Exchange Act of 1934 (the "Exchange Act"). See Exhibits 31.1 and 31.2. This Item 9A includes information
concerning the controls and control evaluations referred to in those certifications.
Background
The Audit Committee of our Board of Directors has completed an independent investigation into certain accounting and
financial reporting matters. As a result of issues identified in that investigation, as well as issues identified in additional
reviews and procedures conducted by management, the Audit Committee, in consultation with management and
PricewaterhouseCoopers LLP, our independent registered public accounting firm, concluded on August 13, 2007 that our
previously issued financial statements for Fiscal 2003, 2004, 2005, and 2006 (including the interim periods within those
years), and the first quarter of Fiscal 2007, should no longer be relied upon because of certain accounting errors and
irregularities in those financial statements. Accordingly, we have restated our previously issued financial statements for those
periods. See "Part II — Item 7 — Management's Discussion and Analysis of Financial Condition and Results of
Operations — Audit Committee Independent Investigation and Restatement" and Note 2 of Notes to Consolidated Financial
Statements included in "Part II — Item 8 — Financial Statements and Supplementary Data."
As a result of management's review of the investigation issues and its other internal reviews, we have identified several
deficiencies in our internal control over financial reporting, including our control environment and period-end financial
reporting process, which are discussed more fully below. The control deficiencies failed to prevent or detect a number of
accounting errors and irregularities, which led to the restatement described above. The control deficiencies represent
material weaknesses in our internal control over financial reporting and require corrective and remedial actions.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to
ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated
and communicated to management, including the chief executive officer and the chief financial officer, to allow timely
decisions regarding required disclosures.
In connection with the preparation of this Report, Dell's management, under the supervision and with the participation of the
current Chief Executive Officer and current Chief Financial Officer, conducted an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures as of February 2, 2007. Based on that evaluation, the
restatement of previously issued financial statements described above, and the identification of certain material weaknesses
in internal control over financial reporting (described below), which we view as an integral part of our disclosure controls and
procedures, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and
procedures were not effective as of February 2, 2007. Nevertheless, based on a number of factors, including the completion
of the Audit Committee's investigation, our internal review that identified revisions to our previously issued financial
statements, efforts to remediate the material weaknesses in internal control over financial reporting described below, and the
performance of additional procedures by management designed to ensure the reliability of our financial reporting, we believe
that the consolidated financial statements in this Report fairly present, in all material respects, our financial position, results
of
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