Company: ST
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001477294-25-000067
Chunk: 41

Company: Sensata Technologies Holding plc
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 41
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 Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

Material Weakness Remediation Plan

We have devoted a significant amount of time and resources towards remediation of the material weaknesses. We will continue to execute on our remediation plan until the material weaknesses are remediated. Actions taken to date, and expected to be taken, include the following: 

•Completion of an internal organizational assessment to identify gaps in knowledge and staffing levels and consider potential reorganization of our teams.

•Hiring of additional accounting and IT personnel, including a new Chief Accounting Officer in May 2024, with the appropriate level of knowledge, training, and experience to improve our internal control over financial reporting and IT capabilities. We continue to recruit for additional resources.

•Engaged a third party to assist in development and formalization of a risk assessment process across the organization to identify risks and design new controls or enhance existing controls responsive to such risks to ensure timely and accurate financial reporting based on criteria established in the COSO framework. We are in various stages of this risk assessment process and control development process, including assessing and documenting control gaps and remediating existing control gaps.

•Implemented a global system to enhance our account reconciliation process, increase monitoring capabilities, and improve our consistency.  

•Assessed the specific training needs for newly hired and existing personnel and developed and delivered training programs designed to enhance our internal controls over financial reporting.

•Enhanced the procedures regarding our annual physical inventory counts, including employee training in performing annual physical counts and clarification of instructions as to the process for recording adjustments to inventory as a result of physical counts. We have completed physical inventories at all of our locations.

We are committed to the remediation of these material weaknesses and expect to successfully implement enhanced control processes. However, as we continue to evaluate and work to improve our internal control over financial reporting, we may determine that additional measures to address control deficiencies or modifications to the remediation plan are necessary. 

Inherent Limitations on Effectiveness of Controls

There are inherent limitations to the effectiveness of any system of internal control over financial reporting. Accordingly, even an effective system of internal control over financial reporting can only provide reasonable assurance with respect to financial statement preparation and presentation in accordance with United States generally accepted accounting principles