MERCADOLIBRE INC Annual Report (Amendment), Year Ended Dec 31, 2019

MercadoLibre Inc. (MELI) filed an amendment to its 2019 Form 10-K on December 22, 2020, primarily addressing material weaknesses identified in its internal controls over financial reporting as of December 31, 2019. These weaknesses stemmed from deficiencies in its payment processing controls, particularly concerning the reconciliation of accounts receivable from payment partners. Specifically, the company noted issues with risk assessment related to regulatory changes impacting the credit card industry in Argentina, inadequate IT systems for automated reconciliations, insufficient control activities for verifying and assessing the recoverability of receivables, and ineffective monitoring. Despite these control deficiencies, MELI stated that no material errors were found in its financial results and no restatement of prior financial statements was necessary. While the company has outlined a remediation plan expected to be completed by the end of fiscal year 2020, the independent auditor, Deloitte & Co S.A., issued an adverse opinion on the effectiveness of MELI's internal control over financial reporting as of December 31, 2019. Investors should note that the material weaknesses are considered remediated only after controls have operated effectively for a sufficient period and have been tested. The filing also confirms that the company's disclosure controls and procedures were also deemed not effective as of December 31, 2019, due to these same control deficiencies.