Vonage 2014 Annual Report Download - page 58

Table of Contents
F-3 VONAGE ANNUAL REPORT 2014
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Board of Directors and Stockholders
Vonage Holdings Corp.
Holmdel, New Jersey
We have audited Vonage Holdings Corp.’s (the “Company”) internal control over financial reporting as of December 31, 2014, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(the “COSO criteria”). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A. Management’s Report on Internal
Control Over Financial Reporting.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on
our audit.
We conducted our audit 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 effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that
a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
A company’s 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. A company’s
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 the transactions and dispositions of the assets of the company; (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
receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
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.
As indicated in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting”, management’s assessment
of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Telesphere Networks Ltd.,
which was acquired on December 15, 2014, and which is included in the consolidated balance sheets of Vonage Holdings Corp. as of December
31, 2014, and the related consolidated statements of income, comprehensive income, stockholders’ equity (deficit) and redeemable noncontrolling
interest and cash flows for the year then ended. Telesphere Networks Ltd. constituted 2% of total assets as of December 31, 2014 and 0.2% of
revenues for the year then ended. Management did not assess the effectiveness of internal control over financial reporting of Telesphere because
of the timing of the acquisition which was completed on December 15, 2014. Our audit of internal control over financial reporting of Vonage Holdings
Corp. also did not include an evaluation of the internal control over financial reporting of Telesphere Networks Ltd.
In our opinion, Vonage Holdings Corp. maintained, in all material respects, effective internal control over financial reporting as of December 31,
2014, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated
balance sheets of Vonage Holdings Corp. as of December 31, 2014 and 2013 and the related consolidated statements of income, comprehensive
income, stockholders’ equity (deficit) and redeemable noncontrolling interest, and cash flows for each of the three years in the period ended
December 31, 2014 and our report dated February 13, 2015 expressed an unqualified opinion thereon.
/s/ BDO USA, LLP
Woodbridge, New Jersey
February 13, 2015