Etsy 2015 Annual Report Download - page 106

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

None.


Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls
and procedures as of December 31, 2015. “Disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are
designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is (i) recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and
communicated to the company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely
decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures were effective as of December 31, 2015 at the reasonable assurance level.

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation
report of our registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

We previously identified and disclosed in our Registration Statement on Form S-1 for the period ended December 31, 2014, as well as in our Quarterly
Reports on Form 10-Q for each interim period in fiscal year 2015, material weaknesses in our internal control over financial reporting relating to the
following:
• We did not have adequate procedures and controls to appropriately account for certain non-income tax-related expenses and comply with the related
filing requirements.
• We determined that we did not have adequate cut-off procedures to ensure the timely recording of certain period-end accruals.
The impact of these material weaknesses resulted in the revision of our consolidated financial statements for the years ended December 31, 2012 and 2013,
for the three months ended March 31, 2013, the three and six months ended June 30, 2013, the three and nine months ended September 30, 2013, the three
months ended December 31, 2013 and the three months ended September 30, 2014. The impacts of these material weaknesses also resulted in the restatement
of our consolidated financial statements for the three months ended March 31, 2014, the three and six months ended June 30, 2014 and the nine months
ended September 30, 2014.

Our management, with oversight from our Audit Committee, has implemented the following remediation steps to address the previously disclosed material
weaknesses and to improve our internal control over financial reporting:
• Enhanced and supplemented the tax and accounts payable functions by increasing the number of roles and hiring additional individuals with an
appropriate level of knowledge and experience commensurate with the financial reporting complexities of the organization;
• Updated our systems so that we collect the necessary information to enable us to more effectively monitor and comply with applicable non-income
tax accounting and filing requirements on a timely basis;
• Implemented additional internal reporting procedures, including enhancing the analytical procedures used to assess period-end accruals, to add
depth to our review process and improve our segregation of duties; and
• Enhanced the communication and coordination among our finance departments and expanded cross-functional involvement and input into period-
end accruals.
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