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OWW » Topics » We have identified significant deficiencies in our internal control over financial reporting.This excerpt taken from the OWW 10-K filed Mar 11, 2009. We
have identified significant deficiencies in our internal control
over financial reporting.
In connection with the audit of our consolidated financial
statements for the year ended December 31, 2008, we were
required to make an assessment of the effectiveness of our
internal control over financial reporting. Although our auditors
and we did not identify any matters constituting “material
weaknesses” under the standards established by the Public
Company Accounting Oversight Board (United States)
(“PCAOB”), our auditors and we have identified certain
matters involving our internal control over financial reporting
that constitute “significant deficiencies.”
The PCAOB defines a material weakness as a deficiency, or
combination of deficiencies, in internal control over financial
reporting such that there is a reasonable possibility that a
material misstatement of our annual or interim financial
statements will not be prevented or detected on a timely basis.
A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control over financial reporting that
is less severe than a material weakness, yet important enough to
merit attention by those responsible for oversight of our
financial reporting.
The significant deficiencies identified result from inconsistent
application of controls related to the reconciliation of certain
accounts at our HotelClub subsidiary. Although we are in the
process of developing and implementing a remediation plan to
address these deficiencies and believe they will be remediated,
additional measures may be necessary, and the measures we expect
to take to improve these deficiencies may not be sufficient to
address the issues identified.
Prior to the assessment performed in connection with the audit
of our consolidated financial statements for the year ended
December 31, 2008, we had identified several material
weaknesses in our internal control over financial reporting.
Although our auditors and we believe that we have addressed the
material weaknesses, the measures we have taken may not be
effective, and we may not be able to maintain effective internal
control over financial reporting in the future. As a result,
there can be no assurance that we will not identify other
material weaknesses or additional significant deficiencies in
the future.
If we are unable to correct the identified deficiencies in our
internal controls in a timely manner, or if we identify other
material weaknesses or deficiencies in the future, our ability
to record, process, summarize and report financial information
accurately and within the time periods specified in the rules
and forms of the SEC would be adversely affected. This failure
could negatively affect the market price and trading liquidity
of our common stock, cause investors to lose confidence in our
reported financial information, subject us to civil and criminal
investigations and penalties, and adversely impact our business
and financial condition.
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