Easton-Bell Sports disclosed a material weakness in its internal control over financial reporting at its Bell Sports subsidiary. At year-end, the company explained, “our policies and procedures did not provide for effective oversight and review of the reconciliation of accountsÂat the end of each month.”

As a result, the sporting-goods company continued, various balance-sheet reclassifications and audit adjustments were required prior to the issuance of its financial statements.

Easton-Bell explained that some adjustments were due to its personnel’s insufficient knowledge of a new enterprise-resource software program. In addition, the company acknowledges, it did not adequately review its reconciliation of accounts and the related supporting documentation to ensure compliance with generally accepted accounting principles.

“This material weakness represented more than a remote likelihood that a material misstatement of our annual or interim financial statements would not have been prevented or detected,” Easton-Bell elaborated in the filing.

The company, which stressed that the adjustments do not require a restatement and were not material to its fiscal 2006 results, added that nonetheless, it hopes to remediate the material weakness by the end of the year.

Remediation plans include redesigning and implementing new review and approval procedures and processes associated with reconciling accounts at month-end, providing additional training for select accounting personnel at the Bell Sports subsidiary, and increasing oversight of month-end account reconciliations.