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This excerpt taken from the MRVL 10-K filed Jul 2, 2007. Controls
over stock-based compensation expense under FAS 123(R). The
Company did not maintain effective controls over the accounting for and
disclosure of its stock-based compensation expense under FAS 123(R). The
Company’s controls, including monitoring controls, policies and procedures
relating to the accounting for and disclosure of stock-based compensation were
not effective. Specifically, effective controls were not maintained to ensure
the existence, completeness, accuracy, valuation and presentation of the
Company’s stock-based compensation expense. This control deficiency resulted in
audit adjustments to stock-based compensation expense for the year ended January 27,
2007. This control deficiency could also result in a misstatement to
compensation expense that would result in a material misstatement to the
89 Company’s annual or interim financial statements that would not be prevented or detected. Accordingly, the Company’s management has determined that this control deficiency constitutes a material weakness. These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2007 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements. As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded the Intel’s communication and application processor business (ICAP Business) from its assessment of internal control over financial reporting as of January 27, 2007 because it was acquired by the Company in a purchase business combination in November 2006 and is now wholly owned by Marvell Technology Group Ltd. as discussed in Note 3 to the Company’s consolidated financial statements. We have also excluded the ICAP Business from our audit of internal control over financial reporting. The ICAP Business’ total assets and total revenues represent approximately 17% and approximately 4%, respectively, of the related consolidated financial statement amounts as of and for the year ended January 27, 2007. In our opinion, management’s assessment that Marvell Technology Group Ltd. did not maintain effective internal control over financial reporting as of January 27, 2007, is fairly stated, in all material respects, based on criteria established in Internal Control — Integrated Framework issued by the COSO. Also, in our opinion, because of the effects of the material weaknesses described above on the achievement of the objectives of the control criteria, Marvell Technology Group Ltd. has not maintained effective internal control over financial reporting as of January 27, 2007, based on criteria established in Internal Control — Integrated Framework issued by the COSO. /s/ PricewaterhouseCoopers LLP 90 This excerpt taken from the MRVL 10-Q filed Jul 2, 2007. Controls
over stock-based compensation expense under FAS 123(R). We did
not maintain effective controls over the accounting for and disclosure of our
stock-based compensation expense. Our
controls, including monitoring controls, policies and procedures relating to
the accounting for and disclosure of stock-based compensation were not
effective. Specifically, effective
controls were not maintained to ensure the existence, completeness, accuracy,
valuation and presentation of our stock-based compensation expense. This control deficiency resulted in audit
adjustments to stock-based compensation expense for the year ended January 27,
2007. This control deficiency could also
result in a misstatement to compensation expense that would result in a
material misstatement to our annual or interim financial statements that would
not be prevented or detected.
Accordingly, our management has determined that this control deficiency
constitutes a material weakness.
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