New COSO Framework - Migrating from Update to Operational Readiness

The new framework is structured differently, with 17 principles and 77 points of focus.  While they are not all required in an evaluation of internal control, becoming conversant in the terminology will enable the user to communicate effectively that his/her organization has addressed or successfully complied with the new framework in setting a control framework, testing, or signaling compliance.

 

There is new emphasis on concepts such as objective-setting and technology.  These may help in the design phase to create a more intelligent process and one that addresses the specific needs of your organization, as opposed to having to run a pure “checklist” approach.

 

The new framework emphasizes governance concepts including the involvement of the Board in promoting effective internal control.  The will help the user issue the clarion call to empower the internal control team to harness Board involvement in the name of meeting COSO guidelines for internal control.

 

There is new emphasis on fraud and the origination of fraud in the failure to apply sensible concepts in basic internal control, as well as the failure to be suspect to adequate supervisory and reporting controls.   

 

There is recognition of the expanding nature of reporting since 1992 due to continuous auditing, dashboards, project and milestone reporting, etc.  realizing that there isn’t just financial reporting in the modern organization.