MERITZ & MUENZ LLP
COUNSELORS AT LAW
2021 O Street, NW
Washington, DC 20036
________
Telephone: (202) 728-2909
Facsimile: (202) 728-2910
E-mail: Lmuenz@meritzmuenzllp.com
Lawrence A. Muenz*
*Also admitted in NY
September 10, 2008
U.S. Securities and Exchange Commission
Washington, DC 20549
RE: IVOICE TECHNOLOGY, INC.
FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
FILE NO. 333-120490
Dear Sir or Madam:
My firm serves as corporate counsel to iVoice Technology, Inc. (the "Company").
I am in receipt of your letter dated August 22, 2008 and would like to respond
on behalf of the Company.
1. ITEM 8A (T) CONTROLS AND PROCEDURES
We added the following section to Item 8A (T) relating to the framework of the
evaluation of the effectiveness of the Company's internal control over financial
reporting as of December 31, 2007 to better conform to the requirements of Item
308(T) of Regulation S-B:
"Management conducted an evaluation of the effectiveness of the
Company's internal control over financial reporting as of December 31,
2007. In making this assessment, management used the framework set forth in
the report entitled "Internal Control-Integrated Framework" issued by the
Committee of Sponsoring Organizations of the Treadway Commission, or COSO.
The COSO framework summarizes each of the components of a Company's
internal control system, including (i) the control environment, (ii) risk
assessment, (iii) control activities, (iv) information and communication,
and (v) monitoring."
Therefore, the revised Item 8A (T) shall read as follows:
ITEM 8A(T). CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
The evaluation of our disclosure controls and procedures included a review of
their objectives and design, our implementation of them and their effect on the
information generated for use in this Form 10-KSB. In the course of the controls
evaluation, we reviewed any data errors or control problems that we had
identified and sought to confirm that appropriate corrective actions, including
process improvements, were being undertaken. This type of evaluation is
performed on a quarterly basis so that the conclusions of management, including
our Chief Executive Officer and Chief Financial Officer, concerning the
effectiveness of the disclosure controls can be reported in our periodic reports
on Form 10-KSB and Form 10-QSB. Many of the components of our disclosure
controls and procedures are also evaluated on an ongoing basis. The overall
goals of these various evaluation activities are to monitor our disclosure
controls and procedures and to modify them as necessary.
The Company maintains a set of disclosure controls and procedures designed to
ensure that information required to be disclosed by us in our reports filed
under the Securities Exchange Act, is recorded, processed, summarized, and
reported within the time periods specified by the SEC's rules and forms.
Disclosure controls are also designed with the objective of ensuring that this
information is accumulated and communicated to our management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.
Our Board of Directors were advised by Bagell, Josephs, Levine and Company, LLC,
our independent registered public accounting firm, that during their performance
of review procedures for the year ended December 31, 2006, they have identified
a material weakness as defined in Public Accounting Oversight Board Standard No.
2 in our internal control over financial reporting. Our auditors have identified
the following material weaknesses in our internal controls as of December 31,
2006 and December 31, 2007:
A material weakness in the Company's internal controls exists in that there is
limited segregation of duties amongst the Company's employees with respect to
the Company's preparation and review of the Company's financial statements. This
material weakness is a result of the Company's limited number of employees. This
material weakness may affect management's ability to effectively review and
analyze elements of the financial statement closing process and prepare
financial statements in accordance with U.S. GAAP.
Management conducted an evaluation of the effectiveness of the Company's
internal control over financial reporting as of December 31, 2007. In making
this assessment, management used the framework set forth in the report entitled
"Internal Control-Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission, or COSO. The COSO framework summarizes
each of the
components of a Company's internal control system, including (i) the control
environment, (ii) risk assessment, (iii) control activities, (iv) information
and communication, and (v) monitoring. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer of the Company have concluded, as
of the end of the fiscal year covered by this Annual Report on Form 10-KSB, due
to a lack of segregation of duties, that our disclosure controls and procedures
have not been effective to provide reasonable assurance that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act was recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the Securities and Exchange
Commission and that the information required to be disclosed in the reports was
accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure. However, at this time, our resources and size prevent us
from being able to employ sufficient resources to enable us to have adequate
segregation of duties within our internal control system. The Company intends to
remedy the material weakness by hiring additional employees and reallocating
duties, including responsibilities for financial reporting, among the Company's
employees as soon as the Company has the financial resources to do so.
Management is required to apply judgment in evaluating the cost-benefit
relationship of possible changes in our disclosure controls and procedures.
Other than the material weakness indicated above, no accounting errors or
misstatements have been identified by our disclosure controls and procedures or
by our independent registered public accounting firm that would have a material
effect on our Financial Statements.
This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management's report in this annual
report. Our registered public accounting firm will be required to attest to our
management's assessment of internal control over financial reporting beginning
with our annual report for the year ended December 31, 2009.
CHANGES IN INTERNAL CONTROLS.
Management of the Company has evaluated, with the participation of the Chief
Executive Officer of the Company, any change in the Company's internal control
over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the year covered by this Annual Report on
Form 10-KSB. There was no change in the Company's internal control over
financial reporting identified in that evaluation that occurred during the
fiscal year covered by this Annual Report on Form 10-KSB that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting, other than what has been reported above.
RISK FACTOR RELATED TO CONTROLS AND PROCEDURES
The Company has limited segregation of duties amongst its employees with respect
to the Company's preparation and review of the Company's financial statements
due to the limited number of employees, which is a material weakness in internal
controls, and if the Company fails to maintain an effective system of internal
controls, it may not be able to accurately report its financial results or
prevent fraud. As a result, current and potential stockholders could lose
confidence in the Company's financial reporting which could harm the trading
price of the Company's stock.
Management has found it necessary to limit the Company's administrative
staffing in order to conserve cash, until the Company's level of business
activity increases. As a result, there is very limited segregation of duties
amongst the administrative employees, and the Company and its independent public
accounting firm have identified this as a material weakness in the Company's
internal controls. The Company intends to remedy this material weakness by
hiring additional employees and reallocating duties, including responsibilities
for financial reporting, among the employees as soon as there are sufficient
resources available. However, until such time, this material weakness will
continue to exist. Despite the limited number of administrative employees and
limited segregation of duties, management believes that the Company's
administrative employees are capable of following its disclosure controls and
procedures effectively.
The Company will file an amendment to the Form 10-KSB for the fiscal year ended
December 31, 2007 to contain this revision.
Respectfully yours,
Lawrence A. Muenz