1 unchanged sentence
(a) Evaluation of disclosure controls and procedures.
−Removed: We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that information relating to the Company is accumulated and communicated to management, including our principal officers as appropriate to allow timely decisions regarding required disclosure.
−Removed: Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of September 29, 2019 and have concluded that our disclosure controls and procedures were not effective as of September 29, 2019 due to material weaknesses in our internal control over financial reporting as described below.
−Removed: As previously disclosed, the Company identified misstatements in the previously-reported quarter ended March 31, 2019.
−Removed: The misstatements were the result of improperly designed controls around the implementation of a new enterprise resource planning system (“ERP system”) at our Sypris Electronics segment effective January 1, 2019.
−Removed: Due to data entry processing errors that were made following this transition to the new ERP system, certain vendor invoices related to raw material inventory receipts in the first quarter of 2019 for the Sypris Electronics segment were incorrectly recorded in the second quarter of 2019.
−Removed: These errors resulted in an understatement of accounts payable and cost of sales as of and for the quarter ended March 31, 2019.
−Removed: In connection with the restatement of Company’s financial statements for the quarter ended March 31, 2019, the Company identified two material weaknesses in internal controls over financial reporting that arose from the new ERP system implementation.
−Removed: The two material weaknesses are:
−Removed: The ineffective design and implementation of effective controls with respect to the ERP system transition.
−Removed: Specifically, we did not maintain adequate control over user access within the ERP system to restrict access to accounting period changes in the financial reporting modules.
−Removed: Additionally, we did not exercise sufficient oversight over the ERP system transition, design effective controls over the ERP implementation to ensure appropriate data conversion and data integrity, or provide sufficient end user training to our employees to ensure that our employees could effectively operate the new ERP system and carry out their responsibilities.
−Removed: Inadequate process level and monitoring controls in the area of accounting close and financial reporting.
−Removed: Specifically, we did not have appropriate controls around the review of account reconciliations, and related cut-off, and monitoring of the accounting close cycle.
−Removed: The Audit Committee, the Board of Directors, and management are committed to maintaining a strong internal control environment.
−Removed: As a result, the Company has been actively engaged in developing and implementing remediation plans to address the material weaknesses outlined above.
−Removed: The remediation efforts include the following:
−Removed: User Access – We have restricted the ability of accounting personnel to modify data entry fields that relate to previously closed accounting periods for accounts payable processing.
−Removed: Oversight – We have established a plan to address the control deficiencies arising from our ERP system conversions, including additional training for accounting personnel and a more formal review and documentation process around financial reporting.
−Removed: Accounting Close and Financial Reporting – We have implemented additional analysis and review procedures related to the cost of goods sold variance accounts on a monthly basis and additional controls over the closing of accounting periods within the ERP system.
−Removed: We have hired additional qualified personnel to assist management with its financial statement close process and to provide additional oversight of our financial reporting.
−Removed: Management believes the foregoing remedial efforts will effectively remediate the material weaknesses, but the material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
−Removed: As the Company continues to evaluate and work to improve its internal control over financial reporting, management may determine to take additional measures to address control deficiencies or determine to modify the remediation efforts described above.
+Added: Based on the evaluation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) required by Securities Exchange Act Rules 13a-15(b) or 15d-15(b), our Chief Executive Officer and our Principal Financial Officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.
(b) Changes in internal controls .
−Removed: Beginning January 1, 2019, we implemented the updated guidance on lease accounting.
−Removed: In connection with the adoption of this standard, we implemented changes to our disclosure controls, procedures related to lease accounting as well as the associated control activities within.
−Removed: On January 1, 2019, we implemented an ERP system at Sypris Electronics.
−Removed: The implementation resulted in the two material weaknesses identified above.
−Removed: We believe we have developed an appropriate plan to remediate and are in the process of implementing our remediation efforts related to the material weaknesses.
−Removed: Other than the updates and remediation efforts described above, there were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Other Information
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.