Description
It’s been more than 20 years since the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released its Internal Control—Integrated Framework (the original framework). The new framework became effective in December 2014. Professionals must first obtain a basic understanding of the concepts, principles and potential impact, including changes from the 1992 framework and the key COSO components and related principles.
COSO 2013 maintains the same five components previously identified within the 1992 framework. These include:
- Control Environment
- Risk Assessment
- Control Activities
- Information & Communication
- Monitoring
Each component is now defined by separate principles that underlie the component. Management and the external auditors must understand each of these principles and be able to adequately support that they exist, are appropriately designed and functioning. In addition, the components must effectively work in combination to provide for a positive attestation to internal controls.
The Control Environment is defined as the overall attitude, awareness and actions of directors and management (i.e. “those charged with governance”) regarding the internal control system and its importance to the entity. The Control Environment is named as the first component within COSO 2013.
This course is designed to focus on the Control Environment and the five separate principles that support this component.
- The organization demonstrates commitment to integrity and ethical values.
- The Board maintains independence from management and exercises oversight of internal control.
- Management establishes structure, reporting lines, and appropriate authority and responsibility.
- The organization demonstrates commitment to attract, develop and retain competent individuals.
- The organization holds individuals accountable for internal control responsibilities.
“Citations of information on the COSO framework, principles and points of focus mentioned through this course are directly worded from the COSO literature and relayed here with the permission of COSO.org as a training mechanism related to their framework. The full document of the Framework can be found at COSO.org”
