Rosetta Stone 2014 Annual Report Download - page 53

Table of Contents
December 31, 2014, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were
effective at the reasonable assurance level.
Management's annual report on internal control over financial reporting
Management is responsible for establishing and maintaining adequate internal control over our financial reporting. Management has assessed the
effectiveness of internal control over financial reporting as of December 31, 2014. Management's assessment was based on criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control—Integrated Framework (1992).
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial
reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management
and board of directors; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
Based on using the COSO criteria, management believes our internal control over financial reporting as of December 31, 2014 was effective.
Our independent registered public accounting firm, Deloitte & Touche LLP, has audited the financial statements included in this Annual Report on
Form 10-K and has issued a report on the effectiveness of our internal control over financial reporting. The attestation report of Deloitte & Touche LLP is
included on page F-3 of this Form 10-K.
In May 2013, COSO released an update to the 1992 Integrated Framework. This update is commonly referred to as the COSO 2013 Integrated
Framework and as of December 15, 2014, superseded the 1992 Integrated Framework. We are currently in the process of transitioning our internal controls
over financial reporting to be in compliance with the COSO 2013 Integrated Framework.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) or 15d-
15(d) of the Exchange Act that occurred during the quarter ended December 31, 2014 that had materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
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None.
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