|TERRAFORM GLOBAL, INC. filed this Form 10-K on 06/15/2017|
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. GAAP to complex accounting transactions;
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 Company did not have effective controls over the completeness, accuracy and cut-off of accounts payable and accrued expenses. Specifically, process level controls over the vouchering of invoices, maintenance of current bank signatories and appropriate approval of payments were ineffective due to reliance on manual processing of transactions recorded in the general ledger, as the Company did not utilize integrated accounts payable and treasury systems; and
The Company did not have effective controls in place to ensure the completeness, existence and accuracy of information reported from our operations in Brazil, resulting in inadequate information and knowledge transfer from an acquired entity to our selected third party service provider.
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.
Attestation Report of the Registered Public Accounting Firm on Internal Control over Financial Reporting
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm on our internal control over financial reporting due to exemptions available to us as an “emerging growth company,” as defined by the JOBS Act.
We continue to work to strengthen our internal control over financial reporting. We are committed to ensuring that such controls are designed and operating effectively. Our Board and management take internal control over financial reporting and the integrity of our financial statements seriously and believe that the remediation steps described below are essential to establishing and maintaining strong and effective internal control over financial reporting and addressing the root causes that contributed to the material weaknesses identified. The following actions and plans have been or will be implemented:
The Company implemented an internal audit function and developed a risk based plan that will monitor the Company’s adherence to its policies and procedures including, without limitation, those policies and procedures related to any areas of concern or emphasis that the Board has identified as part of its oversight. These areas predominantly include internal control over financial reporting and implementation of the new financial reporting system;
The Company has created a separate stand-alone corporate organization independent of SunEdison, including, among other things, directly hiring or engaging qualified personnel to establish our own accounting and human resource functions;
The Company continues to evaluate the availability of IT systems and support from SunEdison in relation to the timing of moving to an independent IT system and taking into consideration the impact of the proposed Brookfield Transaction;
The Company will provide additional training for dedicated resources with assigned responsibility and accountability for financial reporting processes and internal controls;
The Company will implement a regularly recurring risk assessment process focused on identifying and analyzing risks of financial misstatement due to error and/or fraud, including management override of controls;
To ensure effective information and communication process, the Company has implemented FCPA training, introduced and communicated an employee code of ethics and established an ethics hotline;