October 26, 2005
New COSO Draft Guidance for Small Companies
Excerpt from COSO statement on new guidance for smaller public companies:
"The guidance asserts that internal control over financial reporting may beaccomplished by choosing approaches to applying the COSO principles that bestfit each company's circumstances in the most effective and efficient manner.According to the guidance, smaller public companies may strengthen internalcontrols by broadening the pool of audit committee members, using controlsbuilt into accounting software, leveraging management monitoring, andoutsourcing some activities. This new guidance provides a tool for managementto use in determining the appropriate level of internal controls overfinancial reporting for smaller businesses. The document is intended for useby board members, senior management, other personnel and external auditors. Because of similar initiatives at the SEC and PCAOB, those organizationseach provided an observer to the project. The report can be accessed at http://www.coso.org. COSO encourages interestedparties to read and comment on the exposure draft and to direct commentsthrough the website at http://www.ic.coso.org. The comment period ends on December31st 2005. Final guidance is expected in the first quarter of 2006."
"The guidance asserts that internal control over financial reporting may beaccomplished by choosing approaches to applying the COSO principles that bestfit each company's circumstances in the most effective and efficient manner.According to the guidance, smaller public companies may strengthen internalcontrols by broadening the pool of audit committee members, using controlsbuilt into accounting software, leveraging management monitoring, andoutsourcing some activities. This new guidance provides a tool for managementto use in determining the appropriate level of internal controls overfinancial reporting for smaller businesses. The document is intended for useby board members, senior management, other personnel and external auditors. Because of similar initiatives at the SEC and PCAOB, those organizationseach provided an observer to the project. The report can be accessed at http://www.coso.org. COSO encourages interestedparties to read and comment on the exposure draft and to direct commentsthrough the website at http://www.ic.coso.org. The comment period ends on December31st 2005. Final guidance is expected in the first quarter of 2006."
