Hertz 2014 Annual Report Download - page 96

Table of Contents



To the Board of Directors
and Stockholders of
Hertz Global Holdings, Inc.
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)1present fairly, in all material respects, the
financial position of Hertz Global Holdings, Inc. and its subsidiariesat December 31, 2014 and December 31, 2013, and the results of their
operations and their cash flows for each of the three years in the period ended December 31, 2014in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the index appearing
under Item 15(a)2presentfairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated
financial statements. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting
as of December 31, 2014, based on criteria established in (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) because material weaknessesin internal control over financial reporting existed as of that
date. The material weaknesses related to 1) the control environment, due to material weaknesses related to a) an inconsistent and sometimes
inappropriate tone at the top was present under the then existing senior management, b) an insufficient complement of personnel with an
appropriate level of knowledge, experience and training commensurate with the Company’s financial reporting requirements, c) unclear reporting
structures, reporting lines and decisional authorities and d) insufficient training of field personnel utilizing the Oracle ERP system implemented in
2013 for the processing of non-fleet procurement; 2) risk assessment, as the Company did not effectively design controls in response to the risks
of material misstatement; 3) information and communication, specifically between the accounting department and other operating departments
necessary to support the proper functioning of internal controls; and 4) monitoring controls, as the Company did not maintain an internal audit
function sufficient to monitor control activities. The control environment material weaknesses contributed to additional material weaknesses as the
Company did not design and maintain effective controls over a) certain accounting estimates, including the effective review of the models,
assumptions, and data used in developing estimates or changes made to assumptions and data; b) the review, approval, and documentation of
journal entries, c) changes to policies and procedures, as well as the review, approval, and documentation related to application of generally
accepted accounting principles. The risk assessment material weakness contributed to an additional material weakness as the Company did not
design effective controls over certain business processes including their period-end financial reporting processes, including controls over the
preparation, analysis, and review of significant account reconciliations and closing adjustments required to assess the appropriateness of certain
account balances at period end.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The
material weaknesses referred to above are described in Management’s Report on Internal Control over Financial Reporting appearing under Item
9A. We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2014
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. The Company's management is responsible for these financial statements and
financial statement schedules, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting included in management's report referred to above. Our responsibility is to express opinions on these
financial statements, on the financial statement schedules, and on the Company's internal control over financial reporting based on our integrated
audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial
statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit
of internal control over financial reporting included obtaining an understanding of internal control over financial
84
Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.