Walmart 2006 Annual Report Download - page 52

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Management of Wal-Mart Stores, Inc. (“Wal-Mart” or the
“Company”) is responsible for the preparation, integrity and objec-
tivity of Wal-Mart’s consolidated fi nancial statements and other fi nan-
cial information contained in this Annual Report to Shareholders.
Those consolidated fi nancial statements were prepared in conformity
with accounting principles generally accepted in the United States. In
preparing those consolidated fi nancial statements, management was
required to make certain estimates and judgments, which are based
upon currently available information and management’s view of
current conditions and circumstances.
The Audit Committee of the Board of Directors, which consists
solely of independent directors, oversees our process of reporting
fi nancial information and the audit of our consolidated fi nancial
statements. The Audit Committee stays informed of the fi nancial
condition of Wal-Mart and regularly reviews management’s fi nan-
cial policies and procedures, the independence of our independent
auditors, our internal control and the objectivity of our fi nancial
reporting. Both the independent auditors and the internal auditors
have free access to the Audit Committee and meet with the Audit
Committee periodically, both with and without management present.
We have retained Ernst & Young LLP, an independent registered
public accounting fi rm, to audit our consolidated fi nancial statements
found in this annual report. We have made available to Ernst & Young
LLP all of our fi nancial records and related data in connection with
their audit of our consolidated fi nancial statements.
We have fi led with the Securities and Exchange Commission
(“SEC”) the required certifi cations related to our consolidated fi nan-
cial statements as of and for the year ended January 31, 2006.
These certifi cations are attached as exhibits to our Annual Report
on Form 10-K for the year ended January 31, 2006. Additionally,
we have also provided to the New York Stock Exchange the required
annual certifi cation of our Chief Executive Offi cer regarding our
compliance with the New York Stock Exchange’s corporate
governance listing standards.
Report on Internal Control Over Financial Reporting.
Management has responsibility for establishing and maintaining
adequate internal control over fi nancial reporting. 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 reporting purposes
in accordance with accounting principles generally accepted in the
United States. Because of its inherent limitations, internal control
over fi nancial reporting may not prevent or detect misstatements.
Management has assessed the effectiveness of the Company’s
internal control over fi nancial reporting as of January 31, 2006.
In making its assessment, management has utilized the criteria set
forth by the Committee of Sponsoring Organizations (“COSO”)
of the Treadway Commission in Internal Control – Integrated
Framework. Management concluded that based on its assessment,
Wal-Mart’s internal control over fi nancial reporting was effective as
of January 31, 2006. Management’s assessment of the effective-
ness of the Company’s internal control over fi nancial reporting as
of January 31, 2006, has been audited by Ernst & Young LLP, an
independent registered public accounting fi rm, as stated in their
report which appears in this Annual Report to Shareholders.
Management’s assessment of the effectiveness of the Company’s
internal control over fi nancial reporting excluded The Seiyu, Ltd.
and Sonae Distribuição Brasil S.A., both of which were acquired in
fi scal 2006. These entities represented, in the aggregate, 5.8% and
0.1% of consolidated total assets and consolidated net sales, respec-
tively, of the Company as of and for the year ended January 31,
2006. These acquisitions are more fully discussed in Note 6 to our
consolidated fi nancial statements for fi scal 2006. Under guidelines
established by the SEC, companies are allowed to exclude acquisi-
tions from their fi rst assessment of internal control over fi nancial
reporting following the date of the acquisition.
Evaluation of Disclosure Controls and Procedures.
We maintain disclosure controls and procedures designed to pro-
vide reasonable assurance that information required to be timely
disclosed is accumulated and communicated to management in a
timely fashion. Management has assessed the effectiveness of these
disclosure controls and procedures as of January 31, 2006, and
determined they were effective as of that date to provide reasonable
assurance that information required to be disclosed by us in the
reports we fi le or submit under the Securities Exchange Act of 1934,
as amended, was accumulated and communicated to management,
as appropriate, to allow timely decisions regarding required disclo-
sure and were effective to provide reasonable assurance that such
information is recorded, processed, summarized and reported
within the time periods specifi ed by the SEC’s rules and forms.
Report on Ethical Standards.
Our Company was founded on the belief that open communica-
tions and the highest standards of ethics are necessary to be suc-
cessful. Our long-standing “Open Door” communication policy
helps management be aware of and address issues in a timely and
effective manner. Through the open door policy all associates are
encouraged to inform management at the appropriate level when
they are concerned about any matter pertaining to Wal-Mart.
Wal-Mart has adopted a Statement of Ethics to guide our associ-
ates in the continued observance of high ethical standards such
as honesty, integrity and compliance with the law in the conduct
of Wal-Mart’s business. Familiarity and compliance with the
Statement of Ethics is required of all associates who are part of
management. The Company also maintains a separate Code of
Ethics for our senior fi nancial offi cers. Wal-Mart also has in place a
Related-Party Transaction Policy. This policy applies to Wal-Mart’s
senior offi cers and directors and requires material related-party
transactions to be reviewed by the Audit Committee. The senior
offi cers and directors are required to report material related-party
transactions to Wal-Mart. We maintain an ethics offi ce which over-
sees and administers an ethics hotline. The ethics hotline provides
a channel for associates to make confi dential and anonymous
complaints regarding potential violations of our statements of ethics,
including violations related to fi nancial or accounting matters.
H. Lee Scott
President and Chief Executive Offi cer
Thomas M. Schoewe
Executive Vice President and Chief Financial Offi cer
Management’s Report to Our Shareholders
WAL-MART