Rosetta Stone 2013 Annual Report Download - page 64

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Table of Contents

To the Board of Directors and Stockholders of
Rosetta Stone Inc.
Arlington, VA
We have audited the accompanying consolidated balance sheets of Rosetta Stone Inc. and subsidiaries (the "Company") as of December 31, 2013 and 2012,
and the related consolidated statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for each of the three years in the
period ended December 31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the financial statements based on our 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Rosetta Stone Inc. and subsidiaries as of
December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in
conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 3 to the financial statements, the Company changed its accounting policy for sales commissions related to non-cancellable Software-as-a-
Service contracts. The effect of the change is included in the accompanying financial statements retrospectively for all periods presented.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control
over financial reporting as of December 31, 2013, based on the criteria established in  issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2014 expressedan unqualified opinion on the
Company's internal control over financial reporting.
/s/ Deloitte & Touche LLP
McLean, Virginia
March 3, 2014
F-2