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90
Our independent registered public accounting firm, Deloitte & Touche LLP, has audited our consolidated financial statements and
has issued an attestation report on our internal control over financial reporting as of December 31, 2014, which report is included
herein.
Material Weakness Discussion and Remediation
To address the material weaknesses that were noted in the Restatement Periods, we commenced initiatives in 2013 to enhance the
control environment and strengthen our internal control over financial reporting and those initiatives continued in 2014. We have
a new management team, including a new Chief Executive Officer who was appointed in February 2013, a new Chief Financial
Officer who was appointed in April 2013 and a new Chief Accounting Officer who was appointed in October 2013. In addition, a
number of new, qualified accounting and finance personnel have been hired to supplement the experience and depth of the team
responsible for designing, implementing, monitoring and executing internal control over financial reporting during 2013 and
2014. In order to effect the restatement of millions of transactions over a nine-year period, a significant amount of effort was
exerted by both our resources and third-party consultants. Due to the significant attention and efforts devoted to the revenue
restatement project, we have not fully implemented all of the changes necessary to remediate the control deficiencies described
above. Rather, management has obtained its assurance on the financial statements from substantive procedures and review
processes that are outside of the normal course of the financial close and reporting processes. As noted below, we have
commenced the process to implement and formalize internal controls that are necessary to fully remediate the deficiencies
identified.
The management team was able to obtain a reasonable level of assurance that data and corresponding revenue recognition was
accurate and complete through highly substantive complementary validation procedures. Similarly, we performed substantive
validation procedures on the other financial statement balances to obtain a reasonable level of assurance on the other balances. As
a result of these procedures, we believe that the consolidated financial statements included in this Annual Report on Form 10-K
for the year ended December 31, 2014 fairly present, in all material respects, our financial position, results of operations and cash
flows for the periods presented in conformity with GAAP.
While meaningful remediation efforts were initiated in 2013 and continued in 2014, we were not able to fully implement and/or
test the design and the operating effectiveness of the new control procedures as of December 31, 2014 due to the significant level
of effort and attention required to effect the restatement through most of 2014. This required us to conduct restatement efforts and
design new processes and controls concurrently, and thus did not allow us sufficient time to fully implement and/or test the design
and operating effectiveness of the new controls.
In addition we concluded that the time between implementing newly designed controls and December 31, 2014 was not sufficient
to demonstrate that improvements made to the control environment, control activities, information and communication, and
monitoring activities, were in fact appropriately designed and operated effectively.
We intend to continue to take appropriate and reasonable steps to make necessary improvements to our internal control over
financial reporting, including:
• Continuing to improve the control environment through (i) being staffed with sufficient number of personnel
appropriately qualified to perform control monitoring activities, (ii) increasing the level of GAAP knowledge and
experience through ongoing training and staffing adjustments, and (iii) implementing and formalizing corporate
oversight of accounting judgments and estimates;
• Implementing a formal risk assessment process;
• Formalizing and implementing controls over the inputs inherent in our revenue recognition models;
• Implementing control activities that address relevant risks and assure that all transactions are subject to such control
activities;
• Ensuring all information systems that impact revenue recognition and other financial information and disclosures have
effective information technology controls, including access and change management controls; and