{"url_path":"/sec/raasy/10-k/2026/item-15","section_key":"item-15","section_title":"Item 15 CONTROLS AND PROCEDURES**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1804583/0001493152-26-021875-index.html","accession_number":"0001493152-26-021875","cik":"0001804583","ticker":"RAASY","issuer_name":"Cloopen Group Holding Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1804583/0001493152-26-021875-index.html","primary_entity_key":"0001804583","primary_entity_name":"Cloopen Group Holding Ltd"},"word_count":891,"has_tables":true,"body_markdown":"**ITEM\n15. CONTROLS AND PROCEDURES**\n\n \n\n**Disclosure\nControls and Procedures**\n\n \n\nOur\nmanagement, with the participation of our chief executive officer and our chief financial officer, has performed an evaluation of the\neffectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, as of December 31, 2025.\n\n \n\nBased\nupon that evaluation, our management has concluded that, as of December 31, 2025, our disclosure controls and procedures were ineffective\ndue to the outstanding material weaknesses detailed under the below section.\n\n \n\n**Management’s\nAnnual Report on Internal Control over Financial Reporting**\n\n \n\nOur\nmanagement is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f)\nunder the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial\nreporting and the preparation and fair presentation of our published consolidated financial statements. Because of its inherent limitations,\ninternal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness\nto future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of\ncompliance with the policies or procedures may deteriorate.\n\n \n\nAs\nrequired by Section 404 and related rules promulgated by the SEC, our management assessed the effectiveness of our internal control over\nfinancial reporting as of December 31, 2024. In making this assessment, our management used the criteria established in the Internal\nControl—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this\nassessment, our management has concluded that, as of December 31, 2025, our internal control over financial reporting was ineffective\ndue to the material weaknesses identified below. ****\n\n \n\nAs\ndefined in the standards established by the PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies,\nin internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual\nor interim consolidated financial statements will not be prevented or detected on a timely basis.\n\n \n\nThe\nmaterial weaknesses identified relate to: (1) insufficient accounting personnel with appropriate U.S. GAAP knowledge for accounting of\ncomplex transactions, presentation and disclosure of financial statements in accordance with U.S. GAAP and SEC reporting requirements,\n(2) inadequate rigorous implementation of controls over financial closing policies and procedures, (3) lack of sufficient procedures\non recognizing revenue on a gross basis or a net basis, (4) insufficient controls and reporting procedures on monitoring the past due\nstatus of customer to assess the revenue recognition and provision of accounts receivable, (5) insufficient due diligence, monitoring\nand review controls in the long-term investment procedures.\n\n \n\nTo remedy the identified material weaknesses,\nwe have begun to, and will continue to, improve our internal control over financial reporting, including, among others: (1) conducting\nongoing U.S. GAAP accounting and financial reporting training for our accounting and financial reporting personnel; (2) refining guidance\nand manuals for financial close policies and procedures, and improving the quality and accuracy of the period-end financial close process—with\na specific focus on key areas including gross versus net revenue recognition and monitoring of accounts receivable past-due status (to\nassess the reasonableness of revenue recognition and the adequacy of the allowance for doubtful accounts). These revised documents have\nbeen approved by management and are being rolled out gradually; (3) engaging an external vendor to perform milestone-based tracking and\nmonitoring of project collections to facilitate accounts receivable recovery and management; (4) the Company has launched the Project\nManagement System (PMS) and other related systems developed by external service providers. Most of the functionalities were officially\nimplemented in 2025, and all remaining functionalities have been fully developed and will be successively launched in 2026 upon completion\nof rigorous user acceptance testing. Because such remedial measures had not been fully implemented as of December 31, 2025, our management\nconcluded that the material weaknesses still existed as of the date of this annual report.\n\n \n\n138\n\n \n\n \n\nWe\ncannot assure you that we will remediate our material weaknesses in a timely manner. See “Item 3. Key Information—D. Risk\nFactors—Risks Related to the Independent Investigation and Restatement of Consolidated Financial Statements—If we fail to\nimplement and maintain an effective system of internal control over financial reporting, we could be unable to accurately report our\nresults of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of the ADSs may\nbe materially and adversely affected.”\n\n \n\n**Attestation\nReport of the Registered Public Accounting Firm**\n\n \n\nAs\na company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company”\npursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are\notherwise applicable generally to public companies. Specifically, our independent registered public accounting firm is not required to\nformally attest to the effectiveness of our internal control over financial reporting until after we are no longer an “emerging\ngrowth company.” As such, this annual report on Form 20-F does not include an attestation report of our registered public accounting\nfirm.\n\n \n\n**Changes\nin Internal Control over Financial Reporting**\n\n \n\nOther\nthan as described above, there were no changes in our internal control over financial reporting during the fiscal year of 2024 that have\nmaterially affected, or are reasonably likely to materially affect, our internal control over financial reporting."}