Autodesk 2015 Annual Report Download - page 118

2015 Form 10-K 26
We are subject to legal proceedings and regulatory inquiries, and we may be named in additional legal proceedings or become
involved in regulatory inquiries in the future, all of which are costly, distracting to our core business and could result in an
unfavorable outcome, or a material adverse effect on our business, financial condition, results of operations, cash flows or the
trading price for our securities.
We are involved in legal proceedings and receive inquiries from regulatory agencies. As the global economy has changed
and our business has evolved, we have seen an increase in litigation activity and regulatory inquiries. Like many other high
technology companies, the number and frequency of inquiries from U.S. and foreign regulatory agencies we have received
regarding our business and our business practices, and the business practices of others in our industry, have increased in recent
years. In the event that we are involved in significant disputes or are the subject of a formal action by a regulatory agency, we
could be exposed to costly and time consuming legal proceedings that could result in any number of outcomes. Any claims or
regulatory actions initiated by or against us, whether successful or not, could result in expensive costs of defense, costly
damage awards, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant
dedication of management time, diversion of significant operational resources, or otherwise harm our business. In any of these
cases, our financial results could be negatively impacted.
Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results
of operations.
Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or
varying interpretations of current accounting pronouncements or taxation practice could have a significant adverse effect on our
results of operations or the manner in which we conduct our business. Further, such changes could potentially affect our
reporting of transactions completed before such changes are effective.
For example, the U.S.-based Financial Accounting Standards Board (“FASB”) is currently working together with the
International Accounting Standards Board (“IASB”) on several projects to further align accounting principles and facilitate
more comparable financial reporting between companies who are required to follow U.S. Generally Accepted Accounting
Principles (“GAAP”) under SEC regulations and those who are required to follow IFRS outside of the U.S. These efforts by the
FASB and IASB may result in different accounting principles under GAAP that may result in materially different financial
results for us in areas including, but not limited to principles for recognizing revenue and lease accounting.
It is not clear if or when these potential changes in accounting principles may become effective, whether we have the
proper systems and controls in place to accommodate such changes and the impact that any such changes may have on our
consolidated financial position, results of operations and cash flows. In addition, as we evolve and change our business and
sales models, we are currently unable to determine how these potential changes may impact our new models, particularly in the
area of revenue recognition.
We regularly invest resources to update and improve our information technology systems. Should our investments not succeed,
or if delays or other issues with new or existing internal technology systems disrupt our operations, our business could be
harmed.
We rely on our network and data center infrastructure, technology systems and our websites for our development,
marketing, operational, support, sales, accounting, and financial reporting activities. We are continually investing resources to
update and improve these systems and environments in order to meet the growing and evolving requirements of our business
and customers. Such improvements are often complex, costly, and time consuming. In addition, such improvements can be
challenging to integrate with our existing technology systems, or uncover problems with our existing technology systems.
Unsuccessful implementation of hardware or software updates and improvements could result in disruption in our business
operations, loss of revenue, errors in our accounting and financial reporting, or damage to our reputation.
Although we believe we currently have adequate internal control over financial reporting, we are required to evaluate our
internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 and any adverse results from
such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock
price.
Pursuant to Section 404, we are required to furnish a report by our management on our internal control over financial
reporting. The report contains, among other matters, an assessment of the effectiveness of our internal control over financial
reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting
2015 Annual Report