Avid 2014 Annual Report Download - page 17

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• difficulties in maintaining effective internal controls over financial reporting and disclosure controls;
• costs and delays associated with developing products in multiple languages; and
• foreign exchange controls that may prevent or limit our ability to repatriate income earned in foreign markets.
Our overall success in international markets depends, in part, on our ability to succeed in differing legal, regulatory, economic,
social and political conditions. We may not be successful in developing, implementing or maintaining policies and strategies that
will be effective in managing these risks in each country where we do business. Our failure to manage these risks successfully,
including developing appropriate contingency plans for our outsourced research and development work, could harm our
international operations, reduce our international sales and increase our costs, thus adversely affecting our business, operating
results and financial condition.
We have a significant relationship with a development vendor operating in Kiev, Ukraine and manufacturing vendors
operating in China and Thailand, and changes to those relationships may result in delays or disruptions that could harm
our business.
We rely on an offshore software development vendor for developing and servicing our products primarily from its offices in Kiev,
Ukraine and manufacturing vendors for manufacturing certain of our products and developing hardware primarily in China and
Thailand. If one of those vendors were, for any reason, to cease or experience significant disruptions in its operations, among
others as a result of political unrest, we might be unable to replace it on a timely basis with a comparably priced provider. We
would also have to expend time and resources to train any new development or manufacturing vendor. If any of the vendors were
to suffer an interruption in its business, or experience delays, disruptions or quality control problems in development or
manufacturing operations, or if we had to change development or manufacturing vendors, our ability to provide services to our
customers would be delayed and our business, operating results and financial condition would be adversely affected.
We operate in many different jurisdictions and we could be adversely affected by violations of the U.S. Foreign Corrupt
Practices Act, the U.K. Bribery Act and similar foreign anti-corruption laws.
The FCPA, and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from offering,
promising, authorizing, or making payments to foreign officials for the purpose of influencing any act or decision of such official
in his or her official capacity, inducing the official to do any act in violation of his or her lawful duty, or to secure any improper
advantage in obtaining or retaining business. Recent years have seen a substantial increase in the global enforcement of anti-
corruption laws, with more frequent voluntary self-disclosures by companies, aggressive investigations and enforcement
proceedings by both the DOJ and the SEC resulting in record fines and penalties, increased enforcement activity by non-U.S.
regulators, and increases in criminal and civil proceedings brought against companies and individuals.
Our internal policies mandate compliance with these anti-corruption laws. We operate in many parts of the world that are
recognized as having governmental corruption problems to some degree and where local customs and practices may not foster
strict compliance with anti-corruption laws. Our continued operation and expansion outside the United States could increase the
risk of such violations in the future. Despite our training and compliance programs, we cannot assure you that our internal control
policies and procedures will protect us from unauthorized reckless or criminal acts committed by our employees or agents. In the
event that we believe or have reason to believe that our employees or agents have or may have violated applicable anti-corruption
laws, including the FCPA, we may be required to investigate or have outside counsel investigate the relevant facts and
circumstances, which can be expensive and require significant time and attention from senior management. Violations of these
laws may result in severe criminal or civil sanctions, which could disrupt our business and result in a material adverse effect on
our reputation, business, results of operations or financial condition.
Failure of our information systems or breaches of data security could impact our business.
Our systems and processes involve the storage and transmission of proprietary information and sensitive or confidential data,
including personal information of employees, customers and others. In addition, we rely on information systems controlled by
third parties. Information system failures, network disruptions and system and data security breaches, manipulation, destruction
or leakage, whether intentional or accidental, could harm our ability to conduct our business, impede development, manufacture
or shipment of products, interrupt or delay processing of transactions and reporting financial results or result in the unintentional
disclosure of proprietary, sensitive or confidential information. With our development of Avid Everywhere with its public and
private marketplaces and cloud based offerings, our and our customer’s data and financial and proprietary information could