BUCA » Topics » Item 4. Controls and Procedures

This excerpt taken from the BUCA 10-K filed Mar 14, 2007.

Item 9A.    Controls and Procedures

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control— Integrated Framework. Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2006.

Our management has discussed these matters with our audit committee. Grant Thornton LLP has issued an attestation report on our management’s assessment of internal control over financial reporting, which appears below.

Changes in Internal Control Over Financial Reporting

In the fourth quarter of fiscal 2006, we implemented a new financial reporting software system. This change to our internal controls over financial reporting has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

BUCA, Inc. and Subsidiaries

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, that BUCA, Inc. (the “Company”) maintained effective internal control over financial reporting as of December 31, 2006, 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 maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s

 

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assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial 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 (3) 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 financial statements.

Because of its inherent limitations, internal control over financial 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.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of BUCA, Inc. as of December 31, 2006 and the related consolidated statements of operations, shareholders’ equity and cash flows for the year ended December 31, 2006 and our report dated March 13, 2007 expressed an unqualified opinion on those financial statements.

/s/ Grant Thornton LLP

Minneapolis, Minnesota

March 13, 2007

This excerpt taken from the BUCA 10-Q filed Nov 1, 2006.

Item 4. Controls and Procedures

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our principal executive officer and principal financial officer concluded that as of September 24, 2006, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms due to the material weaknesses in internal control over financial reporting as described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 25, 2005 that have not been remediated. In fiscal 2005 and continuing in fiscal 2006, we have begun to remediate identified deficiencies and material weaknesses in our internal control over financial reporting. See “Item 9A. Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 25, 2005 for more information about the deficiencies we have identified and the remediation we have taken and expect to take.

Changes in Internal Control Over Financial Reporting

There have been no changes to our internal control over financial reporting during the third quarter of fiscal 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

This excerpt taken from the BUCA 10-Q filed Aug 4, 2006.

Item 4. Controls and Procedures

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our principal executive officer and principal financial officer concluded that as of June 25, 2006, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms due to the material weaknesses in internal control over financial reporting as described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 25, 2005 that have not been remediated. In fiscal 2005 and continuing in fiscal 2006, we have begun to remediate identified deficiencies and material weaknesses in our internal control over financial reporting. See “Item 9A. Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 25, 2005 for more information about the deficiencies we have identified and the remediation we have taken and expect to take.

Changes in Internal Control Over Financial Reporting

There have been no changes to our internal control over financial reporting during the second quarter of fiscal 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II. OTHER INFORMATION

This excerpt taken from the BUCA 10-Q filed May 4, 2006.

Item 4. Controls and Procedures

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our principal executive officer and principal financial officer concluded that as of March 26, 2006, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms due to the material weaknesses in internal control over financial reporting as described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 25, 2005 that have not been remediated. In fiscal 2005 and continuing in fiscal 2006, we have begun to remediate identified deficiencies and material weaknesses in our internal control over financial reporting. See “Item 9A. Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 25, 2005 for more information about the deficiencies we have identified and the remediation we have taken and expect to take.

Changes in Internal Control Over Financial Reporting

There have been no changes to our internal control over financial reporting during the first quarter of fiscal 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

This excerpt taken from the BUCA 10-Q filed Nov 9, 2005.

Item 4. Controls and Procedures

 

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our principal executive officer and principal financial officer concluded that as of September 25, 2005, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms due to the material weaknesses in internal control over financial

 

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reporting as described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 26, 2004 that have not been remediated. In fiscal 2004, we began to remediate identified deficiencies and material weaknesses in our internal control over financial reporting. See “Item 9A. Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 26, 2004 for more information about the deficiencies we have identified and the remediation we have taken and expect to take.

 

As previously reported, subsequent to the filing of our Quarterly Reports on 10-Q for the quarters ended March 27, 2005 and June 26, 2005, we discovered additional deficiencies related to the design and operation of accounting procedures and application of GAAP. We identified errors in our accounting for depreciation of fixed assets, interest expense, lease payments, medical benefits and other prepaid expenses. These matters represented material weaknesses in internal control over financial reporting and resulted in the restatement of our condensed consolidated financial statements for the quarters ended March 27, 2005 and June 26, 2005.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes to our internal control over financial reporting during the third quarter of fiscal 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

This excerpt taken from the BUCA 10-Q filed Nov 9, 2005.

Item 4. Controls and Procedures

 

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our principal executive officer and principal financial officer concluded that as of June 26, 2005, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms due to the material weaknesses in internal control over financial reporting as described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 26, 2004. In fiscal 2004, we began to remediate identified deficiencies and material weaknesses in our internal control over financial reporting. See “Item 9A. Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 26, 2004 for more information about the deficiencies we have identified and the remediation we have taken and expect to take. Remediation completed in the second quarter of fiscal 2005 includes:

 

    We have changed our whistleblower hotline to a new vendor.

 

    We have adopted a new travel and entertainment policy.

 

Subsequent to the filing on August 4, 2005 of our Quarterly Report on 10-Q for the quarter ended June 26, 2005, we discovered additional deficiencies related to the design and operation of accounting procedures and application of GAAP. We identified errors in our accounting for depreciation of fixed assets, interest expense, lease payments, medical benefits and other prepaid expenses. These matters represented material weaknesses in internal control over financial reporting and resulted in the restatement of our condensed consolidated financial statements for the quarter ended June 26, 2005, as set forth in this Report on Form 10-Q/A. The impact of the restatement on the consolidated financial statements for the quarter ended June 26, 2005 is further discussed in “Note No. 2 - Restatement of Prior Financial Information” appearing in “Part I. Financial Information, Item 1. Financial Statements.”

 

Changes in Internal Control Over Financial Reporting

 

Other than such actions noted above, there have been no other changes to our internal control over financial reporting during the second quarter of fiscal 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II. OTHER INFORMATION

 

This excerpt taken from the BUCA 10-Q filed Nov 9, 2005.

Item 4. Controls and Procedures

 

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our principal executive officer and principal financial officer concluded that as of March 27, 2005, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. In fiscal 2004, we began to remediate identified deficiencies in our internal control over financial reporting. See “Item 9A. Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 26, 2004 for more information about the deficiencies we identified. Remediation completed in the first quarter of fiscal 2005 includes:

 

    We replaced our chief financial officer, chief operating officer and chief family resource officer. In addition, we terminated our chief information officer.

 

    Our audit committee reviews a list of all critical accounting policies and estimates with supporting schedules.

 

    Our management reviews an analysis of significant accounting judgments with our audit committee on a periodic basis.

 

    We have expanded our quarterly internal certification process.

 

    We require that all share-based payment transactions have been properly approved and reviewed for proper accounting treatment.

 

    We analyze all lease transactions in accordance with SFAS No. 13, Accounting for Leases, using a predefined template with supporting documentation of all lease terms and associated assumptions.

 

    The financial close and reporting process has been changed to include eliminating applicable sales entries for complimentary meals to employees

 

    As a part of the new store capital project review, all tenant improvements are reviewed and approved for proper accounting treatment.

 

    We have engaged an actuarial firm to assist us in estimating insurance reserves

 

Subsequent to the filing on July 25, 2005 of our Quarterly Report on 10-Q for the quarter ended March 27, 2005, we discovered additional deficiencies related to the design and operation of accounting procedures and application of GAAP. We identified errors in our accounting for depreciation of fixed assets, interest expense and lease payments. These matters represented material weaknesses in internal control over financial reporting and resulted in the restatement of our condensed consolidated financial statements for the quarter ended March 27, 2005, as set forth in this Report on Form 10-Q/A. The impact of the restatement on the consolidated financial statements for the quarter ended March 27, 2005 is further discussed in “Note No. 2 - Restatement of Prior Financial Information” appearing in “Part I. Financial Information, Item 1. Financial Statements.”

 

Changes in Internal Control Over Financial Reporting

 

Other than such actions noted above, there have been no other changes to our internal control over financial reporting during the first quarter of fiscal 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

This excerpt taken from the BUCA 10-Q filed Aug 4, 2005.

Item 4. Controls and Procedures

 

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our principal executive officer and principal financial officer concluded that as of June 26, 2005, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms due to the material weaknesses in internal control over financial reporting as described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 26, 2004. In fiscal 2004, we began to remediate identified deficiencies and material weaknesses in our internal control over financial reporting. See “Item 9A. Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 26, 2004 for more information about the deficiencies we have identified and the remediation we have taken and expect to take. Remediation completed in the second quarter of fiscal 2005 includes:

 

    We have changed our whistleblower hotline to a new vendor.

 

    We have adopted a new travel and entertainment policy.

 

Changes in Internal Control Over Financial Reporting

 

Other than such actions noted above, there have been no other changes to our internal control over financial reporting during the second quarter of fiscal 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

This excerpt taken from the BUCA 10-Q filed Jul 25, 2005.

Item 4. Controls and Procedures

 

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our principal executive officer and principal financial officer concluded that as of March 27, 2005, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. In fiscal 2004, we began to remediate identified deficiencies in our internal control over financial reporting. See “Item 9A. Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 26, 2004 for more information about the deficiencies we identified. Remediation completed in the first quarter of fiscal 2005 includes:

 

    We replaced our chief financial officer, chief operating officer and chief family resource officer. In addition, we terminated our chief information officer.

 

    Our audit committee reviews a list of all critical accounting policies and estimates with supporting schedules.

 

    Our management reviews an analysis of significant accounting judgments with our audit committee on a periodic basis.

 

    We have expanded our quarterly internal certification process.

 

    We require that all share-based payment transactions have been properly approved and reviewed for proper accounting treatment.

 

    We analyze all lease transactions in accordance with SFAS No. 13, Accounting for Leases, using a predefined template with supporting documentation of all lease terms and associated assumptions.

 

    The financial close and reporting process has been changed to include eliminating applicable sales entries for complimentary meals to employees.

 

    As a part of the new store capital project review, all tenant improvements are reviewed and approved for proper accounting treatment.

 

    We have engaged an actuarial firm to assist us in estimating insurance reserves.

 

 

Changes in Internal Control Over Financial Reporting

 

Other than such actions noted above, there have been no other changes to our internal control over financial reporting during the first quarter of fiscal 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II. OTHER INFORMATION

 

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