INTL FCStone 2013 Annual Report Download - page 135

INTLFCSTONEINC.Form10K114
PART II
ITEM 9Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
ITEM 9 Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure
None.
ITEM9A Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
In connection with the ling of this Form 10-K, our management,
including the principal executive ocer and principal nancial
ocer, evaluated the eectiveness of the design and operation of
our disclosure controls and procedures (as such term is dened in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) as of September 30,
2013. We seek to design our disclosure controls and procedures
to provide reasonable assurance that the reports we le or submit
under the Exchange Act contain the required information and
that we submit these reports within the time periods specied
in SEC rules and forms. We also seek to design these controls
and procedures to ensure that we accumulate and communicate
correct information to our management, including our principal
executive and principal nancial ocers, as appropriate, to allow
timely decisions regarding required disclosure.
Based on our evaluation, we identied a material weakness in our
internal control over nancial reporting related to the accounting
for certain principal over-the-counter derivative trading activities.
Because of the material weakness described below, our principal
executive ocer and principal nancial ocer concluded that
we did not maintain eective internal control over nancial
reporting as of September 30, 2013.
(b) Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining
adequate internal control over nancial reporting, as such term
is dened in Exchange Act Rule 13a-15(f). Our internal control
over nancial reporting is a process designed to provide reasonable
assurance regarding the reliability of nancial reporting and
the preparation of nancial statements for external purposes in
accordance with U.S. generally accepted accounting principles
(“GAAP”). Our internal control over nancial reporting includes
those policies and procedures that: (i) pertain to the maintenance
of records that in reasonable detail accurately and fairly reect
the transactions and dispositions of the assets of the Company;
(ii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of nancial statements in
accordance with GAAP, and that receipts and expenditures of the
Company are being made only in accordance with authorizations
of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s
assets that could have a material eect on the nancial statements.
ere are limitations inherent in any internal control, such as the
possibility of human error and the circumvention or overriding
of controls. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that
the objectives of the control system are met, and may not prevent
or detect misstatements. As conditions change over time, so too
may the eectiveness of internal controls. A material weakness is
a deciency, or a combination of deciencies, in internal control
over nancial reporting such that there is a reasonable possibility
that a material misstatement of our annual or interim nancial
statements will not be prevented or detected on a timely basis.
Management (with the participation of our principal executive
ocer and principal nancial ocer) evaluated the Company’s
internal control over nancial reporting as of September 30,
2013, based on the framework in Internal Control - Integrated
Framework (1992) issued by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission. Based on
the evaluation and the criteria set forth in the COSO report, we
identied a material weakness in internal control over nancial
reporting as described below.