Company: CWAN
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-008169
Chunk: 16

Company: Clearwater Analytics Holdings, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 9A
Chunk 16
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 ended December 31, 2023 a material weakness in our internal control over financial reporting related to ineffective general information technology controls in the Company’s  invoicing systems environment which is relevant to the preparation of our consolidated financial statements related to revenue and accounts receivable, net. Specifically, the Company did not (i) design and implement change management and computer operations controls to ensure configuration data changes affecting the IT applications were appropriate (ii) design and implement program development controls to ensure the data migration, program testing and approval of new software development is aligned with business and IT requirements and (iii) design and implement user access controls to ensure segregation of duties in our invoicing systems. As a result, process level automated controls and manual controls that are dependent on the completeness and accuracy of information derived from the affected information systems were also ineffective because the controls had the potential to be adversely impacted. The material weakness resulted from ineffective risk assessment related to the invoicing IT environment, which led to a lack of the required number of trained IT personnel with the appropriate skills and knowledge related to the design, implementation and operating effectiveness of internal control, and ineffective control activities related primarily to the implementation of the new invoicing systems. 

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 of our annual or interim financial statements will not be prevented or detected on a timely basis. In response, our management, under the oversight of the Audit Committee, has implemented the following remediation steps to address the previously disclosed material weakness: 

•Enhanced risk assessment and control identification procedures for our invoicing systems environment;

•Expanded controls and applied other appropriate procedures to address the design and operation of IT general controls within our invoicing systems environment;

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•Enhanced our training programs addressing IT general controls and policies, including educating control owners concerning the principles and requirements of each control, with a focus on those related to user access, change management, program development and computer operations within our invoicing system environment; and

•Enhanced policy documentation underlying IT general controls to promote knowledge transfer upon personnel and function changes.

Based on the steps implemented, management concluded that we have remediated the previously disclosed material weakness during the quarter ended December 31, 2024.

Changes in Internal Control Over Financial Reporting

Except for the remediation steps described above, there have not been any other changes in our internal control over financial reporting during the three months ended December 31, 202