Nike 2011 Annual Report Download - page 34

34 NIKE,INC.-Form10-K
PARTII
ITEM8Financial Statements and Supplemental Data
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal
control over fi nancial reporting, as such term is defi ned in Rule13a-15(f) and
Rule15d-15(f) of the Securities Exchange Act of 1934, as amended. Internal
control over fi nancial reporting is a process designed to provide reasonable
assurance regarding the reliability of fi nancial reporting and the preparation
of the fi nancial statements for external purposes in accordance with generally
accepted accounting principles in the UnitedStates of America. Internal control
over fi nancial reporting includes those policies and procedures that: (i)pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
refl ect the transactions and dispositions of assets of the company; (ii)provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of fi nancial 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 our management
and directors; and (iii)provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of assets of
the company that could have a material effect on the fi nancial statements.
While “reasonable assurance” is a high level of assurance, it does not mean
absolute assurance. Because of its inherent limitations, internal control over
fi nancial reporting may not prevent or detect every misstatement and instance
of fraud. Controls are susceptible to manipulation, especially in instances of
fraud caused by the collusion of two or more people, including our senior
management. 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.
Under the supervision and with the participation of our Chief Executive Offi cer
and Chief Financial Offi cer, our management conducted an evaluation of the
effectiveness of our internal control over fi nancial reporting based upon the
framework in Internal Control— Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Based
on the results of our evaluation, our management concluded that our internal
control over fi nancial reporting was effective as of May31,2011.
PricewaterhouseCoopers LLP, an independent registered public accounting fi rm,
has audited (1)the consolidated fi nancial statements and (2)the effectiveness
of our internal control over fi nancial reporting as of May31,2011, as stated
in their report herein.
Mark G. Parker DonaldW.Blair
Chief Executive Offi cer and President ChiefFinancialOffi cer
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of NIKE,Inc.:
In our opinion, the consolidated fi nancial statements listed in the index
appearing under Item15(a)(1) present fairly, in all material respects, thefi nancial
position of NIKE,Inc. and its subsidiaries at May31,2011 and 2010, and
the results of their operations and their cash fl ows for each of the threeyears
in the period ended May31,2011 in conformity with accounting principles
generally accepted in the UnitedStates of America. In addition, in our opinion,
the fi nancial statement schedule listed in the appendix appearing under
Item15(a)(2) presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated fi nancial
statements. Also in our opinion, the Company maintained, in all material
respects, effective internal control over fi nancial reporting as of May31,2011,
based on criteria established in Internal Control— Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). The Company’s management is responsible for these fi nancial
statements and fi nancial statement schedule, for maintaining effective internal
control over fi nancial reporting and for its assessment of the effectiveness of
internal control over fi nancial reporting, included in Management’s Annual
Report on Internal Control Over Financial Reporting appearing under Item8.
Our responsibility is to express opinions on these fi nancial statements, on
the fi nancial statement schedule, and on the Company’s internal control over
fi nancial reporting based on our integrated audits. We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight
Board (UnitedStates). Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the fi nancial statements
are free of material misstatement and whether effective internal control over
fi nancial reporting was maintained in all material respects. Our audits of the
fi nancial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the fi nancial statements, assessing the accounting
principles used and signifi cant estimates made by management, and evaluating
the overall fi nancial statement presentation. Our audit of internal control over
fi nancial reporting included obtaining an understanding of internal control over
fi nancial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. Webelieve
that our audits provide a reasonable basis for our opinions.
A company’s internal control over fi nancial reporting is a process designed to
provide reasonable assurance regarding the reliability of fi nancial reporting and
the preparation of fi nancial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over
fi nancial reporting includes those policies and procedures that (i)pertain to the
maintenance of records that, in reasonable detail, accurately and fairly refl ect
the transactions and dispositions of the assets of the company; (ii)provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of fi nancial 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 (iii)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 fi nancial statements.
Because of its inherent limitations, internal control over fi nancial 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.
/s/ PRICEWATERHOUSECOOPERSLLP
Portland, Oregon
July22,2011