The Company did not have effective general information technology controls (GITCs), specifically, system development, program change and access controls over the operating system, databases and IT applications related to the consolidation process. Accordingly, process level automated controls and manual controls that were dependent upon the information derived from the IT systems were also deemed ineffective;
The Company did not have effective controls over the completeness, existence and accuracy of allocated general and administrative expenses and other costs shared with SunEdison;
The Company did not have effective controls over the completeness, existence and accuracy of related party disclosures, intercompany transactions and balances as well as contributions by SunEdison:
The Company did not have effective controls over the completeness and accuracy of information reported from international operations to allow for timely analysis and appropriate application of U.S. generally accepted accounting principles related to complex accounting transactions; and
The Company did not have effective controls over the preparation, review and approval of journal entries, the preparation of periodic financial statements and overall accuracy and completeness of disclosures.
The control deficiencies resulted in several material misstatements to the preliminary consolidated financial statements that were corrected prior to the issuance of the audited consolidated financial statements. These control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis.
Management’s Annual Report on Internal Control Over Financial Reporting
This Annual Report does not include a report on management’s assessment regarding internal control over financial reporting due to a transition period established by the rules of the SEC for newly public companies.
Attestation Report of the Registered Public Accounting Firm on Internal Control over Financial Reporting
This Annual Report does not include an attestation report of our independent registered public accounting firm on our internal control over financial reporting due to a transition period established by the rules of the SEC for newly public companies and due to exemptions available to us as an “emerging growth company,” as defined by the JOBS Act.
We are in the process of developing and implementing our remediation plan which, among other matters, includes implementation of a stand-alone organization by the Company and will provide for an information technology system, trained resources with assigned responsibility and accountability for financial reporting processes, design and effective operation of internal controls, effective risk assessment process, effective information and communication processes and effective monitoring activities in place, in each case independent of SunEdison or with a minimized level of SunEdison’s involvement. We expect our remediation efforts to result in significant changes to our internal control over financial reporting.
Item 9B. Other Information.