First Data 2014 Annual Report Download - page 111

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We have evaluated, under the supervision of our Chief Executive Officer and our Executive Vice President, Director of Finance (principal financial officer),
the effectiveness of disclosure controls and procedures as of December 31, 2014. This is done in order to ensure that information we are required to disclose in
reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods
specified in SEC rules and forms.
Based on this evaluation, our Chief Executive Officer and our Executive Vice President, Director of Finance (principal financial officer), concluded that the
material weakness described below has been fully remediated and closed and that our disclosure controls and procedures were effective as of December 31,
2014.
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Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-
15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is 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.
Our 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 our assets; (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 our receipts and expenditures are being
made only in accordance with authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All control systems have inherent
limitations so that no evaluation of controls can provide absolute assurance that all control issues are detected. 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.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014, based on the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) Framework to Internal Control Environment (2013 framework).
Management had previously concluded that it did not design and maintain effective controls relating to the accounting and reporting for income taxes and
also concluded that this was a material weakness in internal control over financial reporting as of September 30, 2014. Specifically, the controls in place
relating to the establishment and measurement of valuation allowances against deferred tax assets were not properly designed to provide reasonable
assurance that our income tax benefit and deferred tax assets and liabilities would be properly recorded and disclosed in the financial statements. This
material weakness was initially identified in 2012. At the time, we had an insufficient number of personnel with appropriate knowledge, experience or
training in accounting for income taxes. Additionally, the organizational structure resulted in incomplete or inadequate oversight and review of complex
issues, calculations and disclosures. As described below, our management has made significant progress in its remediation efforts and the material weakness
has been fully remediated as of December 31, 2014.
Based on management’s evaluation under the COSO framework, management concluded that our internal controls over financial reporting were effective as
of December 31, 2014.
Ernst & Young LLP, an independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting which
is contained below.
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