Clearwire 2009 Annual Report Download - page 136

• prov
id
e reasona
bl
e assurance t
h
at transact
i
ons are recor
d
e
d
as necessary to perm
i
t preparat
i
on o
ffi
nanc
i
a
l
s
tatements in accordance with
g
enerall
y
accepted accountin
g
principles, and that receipts and expenditures
are being made only in accordance with authorization of our management and directors; and
• prov
id
e reasona
bl
e assurance re
g
ar
di
n
g
prevent
i
on or t
i
me
ly d
etect
i
on o
f
unaut
h
or
i
ze
d
acqu
i
s
i
t
i
on, use o
r
d
is
p
osition of our assets that could have a material effect on the financial statements
.
D
ue to
i
ts
i
n
h
erent
li
m
i
tat
i
ons,
i
nterna
l
contro
l
over
fi
nanc
i
a
l
report
i
ng may not prevent or
d
etect m
i
sstate-
m
ents. In addition, pro
j
ections of an
y
evaluation of effectiveness to future periods are sub
j
ect to the risk tha
t
c
ontrols ma
y
become inadequate because of chan
g
es in conditions or that the de
g
ree of compliance with the policies
or proce
d
ures may
d
eter
i
orate.
O
ur mana
g
ement, un
d
er t
h
e superv
i
s
i
on an
d
w
i
t
h
t
h
e part
i
c
i
pat
i
on o
f
our CEO an
d
CFO, assesse
d
t
he
e
ffectiveness of our internal control over financial reportin
g
as of December 31, 2009. In makin
g
this assessment,
our management use
d
t
h
ecr
i
ter
i
a
d
escr
ib
e
di
nt
h
e Interna
l
Contro
l
-Integrate
d
Framewor
ki
ssue
db
yt
h
e Comm
i
tte
e
o
f
Sponsor
i
n
g
Or
g
an
i
zat
i
ons o
f
t
h
e Trea
d
wa
y
Comm
i
ss
i
on
.
B
ase
d
on t
hi
s assessment, our management conc
l
u
d
e
d
t
h
at our
i
nterna
l
contro
l
over
fi
nanc
i
a
l
report
i
ng was
i
ne
ff
ect
i
ve as o
f
Decem
b
er 31
,
2009
,d
ue to a mater
i
a
l
wea
k
ness
d
escr
ib
e
db
e
l
ow. A mater
i
a
l
wea
k
ness
i
sa
d
e
fi
c
i
enc
y
, or com
bi
nat
i
on o
fd
e
fi
c
i
enc
i
es,
i
n
i
nterna
l
contro
l
over
fi
nanc
i
a
l
report
i
n
g
, suc
h
t
h
at t
h
ere
i
s
a
r
easonable possibility that a material misstatement of our annual or interim financial statements will not b
e
p
revented or detected on a timely basis.
Mana
g
ement identified a material weakness durin
g
its assessment of internal control over financial reportin
g
r
elated to control deficiencies in procedures we implemented for recordin
g
and monitorin
g
the movement o
f
n
etwor
ki
n
f
rastructure equ
i
pment. Dur
i
ng t
h
et
hi
r
d
quarter o
f
2009, we
i
mp
l
emente
d
new proce
d
ures re
l
ate
d
to t
h
e
assembl
y
, shipment, and stora
g
e of network infrastructure equipment to improve flexibilit
y
in deplo
y
in
g
network
i
nfrastructure e
q
ui
p
ment in markets under develo
p
ment. We believed that these new
p
rocedures would im
p
rove ou
r
a
bili
ty to manage t
h
esu
b
stant
i
a
li
ncreases
i
nt
h
evo
l
ume o
f
networ
ki
n
f
rastructure equ
i
pment s
hi
pments necessary
t
o meet our networ
kd
ep
l
o
y
ment tar
g
ets. T
h
ese new proce
d
ures
i
nc
l
u
d
e
di
ncreas
i
n
g
t
h
e num
b
er o
f
ware
h
ouses
utilized for receivin
g
, storin
g
and shippin
g
equipment and outsourcin
g
the mana
g
ement of equipment inventor
y
m
ovements to third party vendors. However, the new procedures implemented did not adequately provide for th
e
ti
me
ly
up
d
at
i
n
g
an
d
ma
i
nta
i
n
i
n
g
o
f
account
i
n
g
recor
d
s
f
or t
h
e networ
ki
n
f
rastructure equ
i
pment. As a resu
l
t
,
m
ovements o
f
t
hi
s equ
i
pment were not proper
ly
recor
d
e
di
n our account
i
n
g
s
y
stem. Accor
di
n
gly
,
i
t
i
s reasona
bly
p
ossible that a material misstatement of our interim or annual financial statements may not be prevented or detecte
d
on a t
i
me
ly b
as
i
s
d
ue to t
h
ese contro
ld
e
fi
c
i
enc
i
es.
T
o provide reasonable assurance re
g
ardin
g
the reliabilit
y
of the financial statements included in this Annual
Report on Form 10-K, our management per
f
orme
d
ap
h
ys
i
ca
l
count o
f
our networ
ki
n
f
rastructure equ
i
pment near
th
een
d
o
f
t
h
e per
i
o
d
a
l
ong w
i
t
h
a
ddi
t
i
ona
l
ana
l
ys
i
san
d
ot
h
er proce
d
ures. To reme
d
yt
h
e mater
i
a
l
wea
k
ness, w
e
e
xpect to modif
y
our procedures for recordin
g
and monitorin
g
the movement of network infrastructure equipment.
These changes may include adding resources focused on transaction processing and enhancing transaction
p
rocess
i
ng systems. F
i
na
ll
y, our management p
l
ans to per
f
orm a
ddi
t
i
ona
l
p
h
ys
i
ca
l
counts o
f
equ
i
pment
d
ur
i
n
g
th
e
fi
rst
q
uarter o
f
2010.
T
he assessment of the effectiveness of our internal control over financial reportin
g
as of December 31, 200
9
h
as
b
een au
di
te
db
yDe
l
o
i
tte & Touc
h
e LLP, an
i
n
d
epen
d
ent reg
i
stere
d
pu
bli
c account
i
ng
fi
rm, as state
di
nt
h
e
ir
attestation re
p
ort, which is included in this Annual Re
p
ort on Form 10-K
.
C
hanges
i
n Internal
C
ontrol over F
i
nanc
i
al Report
i
n
g
O
ther than that described above under “Mana
g
ement’s Report on Internal Control over Financial Reportin
g
”
,
th
ere
h
ave
b
een no s
i
gn
ifi
cant c
h
anges
i
n our
i
nterna
l
contro
l
sover
fi
nanc
i
a
l
report
i
ng
d
ur
i
ng t
h
e year en
d
e
d
D
ecem
b
er 31, 2009 t
h
at
h
ave mater
i
a
ll
ya
ff
ecte
d
, or are reasona
bl
y
lik
e
l
y to mater
i
a
ll
ye
ff
ect, our
i
nterna
l
contro
l
over financial reportin
g
.
12
6