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SEC Filings

10-K
TERRAFORM GLOBAL, INC. filed this Form 10-K on 06/15/2017
Entire Document
 

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 Exchange Act. 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 U.S. GAAP and 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 the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
As of December 31, 2016, management conducted an assessment of the effectiveness of our internal control over financial reporting based upon the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO 2013 Framework). Based on management’s assessment using these criteria, our management concluded that, as of December 31, 2016, our internal control over financial reporting was not effective as further described below.
A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis. As of December 31, 2016, we identified the following material weaknesses:
The Company, and SunEdison as our service provider for certain matters related to financial reporting processes and controls, did not maintain an effective control environment, risk assessment process, information and communication process and monitoring activities based on the following:
The Company did not have effective Board oversight and management monitoring activities over financial reporting processes and internal controls;

The Company did not have a sufficient number of trained resources with assigned responsibility and accountability for financial reporting processes and the design and effective operation of internal controls conducted by SunEdison as our service provider;

The Company did not have an effective risk assessment process that identified and assessed necessary changes in U.S. GAAP, financial reporting processes and internal controls, in response to risks of fraud and error impacted by changes in the business model resulting from rapid growth from acquisitions, changes in information systems, changes at SunEdison and transition of key personnel;

The Company did not have effective information and communication processes to ensure that appropriate and accurate information was available to financial reporting personnel on a timely basis; and

The Company did not have effective monitoring activities in place to evaluate whether the components of internal control were present and functioning. Furthermore, the Company did not have a dedicated internal audit function until 2017.

Accordingly, the Company, and SunEdison as our service provider for certain matters related to financial reporting processes and controls, did not have effective control activities over the following:
The Company did not have effective general information technology controls (GITC), specifically, system development, program change and access controls over the operating system, databases and IT applications related to the consolidation and human resources management processes. Accordingly, process level automated controls and manual controls that were dependent upon the information derived from the ineffective IT applications 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 due to GITC issues noted within SunEdison’s human resources information system;

The Company did not have effective controls over the completeness, existence and accuracy of related party disclosures, intercompany transactions and balances (including improper denomination and timely recording of the foreign exchange impact on intercompany loans) as well as contributions by SunEdison;


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