November 28, 2005
Finally Some Guidance on the New COSO Framework
When the new COSO was released last month, we were highly supportive on this blog. The framework IS principles based. This means that inherently it can be "right-sized". Good job!
An excerpt on an article here:
Scaling COSO by Company Size
''We were not interested in creating 'COSO-lite','' says a board member.
Helen Shaw, CFO.com
November 28, 2005
A recently released exposure draft by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) may have been designed for smaller businesses, but it has applications for larger companies as well.
Chuck Landes, vice president of the professional standards group for the American Institute of Certified Public Accountants (AICPA) — one of COSO's five member organizations — notes that the 189-page draft is aimed at smaller public companies that typically do not have the internal depth and breadth of in-house talent to help them embrace the criteria of the original COSO framework.
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Landes maintains, however, that Guidance for Smaller Public Companies Reporting on Internal Control over Financial Reporting can help businesses both large and small. "We were not interested in creating 'COSO-lite'," says Landes, the AICPA's representative on the COSO board. "Because the framework is principles-based, we feel organizations and non-public entities of any size can use the framework and adapt it."
The draft lists 26 control principles of the original COSO framework that relate to the five elements of internal control: control environment, risk assessment, information and communication, control activities, and monitoring. The principles provide templates for how companies can assess their internal controls, provide alternative examples of how a company can achieve compliance, and make it easier for companies to understand the original framework, says Landes.
"The principles give companies something more solid as a benchmark when they look at internal control," he explains. He notes that the document also offers illustrations of how companies can scale COSO to fit their own needs, so they can have less-formal controls without decreased quality." For the complete article, click here.
To learn more about the "right-sized" Compliance Playbook(tm) to help your company cost effectively comply with Sarbanes-Oxley, see www.issuescentral.com.
An excerpt on an article here:
Scaling COSO by Company Size
''We were not interested in creating 'COSO-lite','' says a board member.
Helen Shaw, CFO.com
November 28, 2005
A recently released exposure draft by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) may have been designed for smaller businesses, but it has applications for larger companies as well.
Chuck Landes, vice president of the professional standards group for the American Institute of Certified Public Accountants (AICPA) — one of COSO's five member organizations — notes that the 189-page draft is aimed at smaller public companies that typically do not have the internal depth and breadth of in-house talent to help them embrace the criteria of the original COSO framework.
title=http://ad.doubleclick.net/jump/cfo2.dart/np1248;pos=body;cat=np1248;kw=;sz=336x280;tile=5;num=static_number?
href="http://ad.doubleclick.net/jump/cfo2.dart/np1248;pos=body;cat=np1248;kw=;sz=336x280;tile=5;num=static_number?">
document.write('');
document.write('');
document.write('');
document.write('');
document.write('');
document.write('');
Landes maintains, however, that Guidance for Smaller Public Companies Reporting on Internal Control over Financial Reporting can help businesses both large and small. "We were not interested in creating 'COSO-lite'," says Landes, the AICPA's representative on the COSO board. "Because the framework is principles-based, we feel organizations and non-public entities of any size can use the framework and adapt it."
The draft lists 26 control principles of the original COSO framework that relate to the five elements of internal control: control environment, risk assessment, information and communication, control activities, and monitoring. The principles provide templates for how companies can assess their internal controls, provide alternative examples of how a company can achieve compliance, and make it easier for companies to understand the original framework, says Landes.
"The principles give companies something more solid as a benchmark when they look at internal control," he explains. He notes that the document also offers illustrations of how companies can scale COSO to fit their own needs, so they can have less-formal controls without decreased quality." For the complete article, click here.
To learn more about the "right-sized" Compliance Playbook(tm) to help your company cost effectively comply with Sarbanes-Oxley, see www.issuescentral.com.
