Tuesday, September 18, 2007

COSO Releases Discussion Document with Guidance on Monitoring Internal Control

Got this in my morning round up:

On September 17, 2007, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released a new discussion document, Guidance on Monitoring Internal Control Systems, and requested public comments. Developed by COSO and led by a team from Grant Thornton LLP, the guidance is designed to help organizations monitor the quality of their internal control systems.

The guidance applies to the internal control objectives over financial reporting, as well as the objectives related to effective operations and compliance. In addition, it includes the principles of effective internal control over financial reporting developed by COSO in 2006, and reiterates the importance of those principles to all organizations, regardless of size.

Topics covered by the guidance include:

  • monitoring as a component of internal control systems;
  • the fundamentals of monitoring;
  • the nature of information used in monitoring;
  • designing effective monitoring;
  • communicating and addressing the results of monitoring;
  • the scalability of monitoring; and
  • the principles of effective internal control over financial reporting.

Through an online feedback portal, COSO is asking specific questions about the clarity and applicability of the guidance. The comment period will end on October 31, 2007. Input from respondents will be used in developing an exposure draft, to be released later this year, including tools, case studies, and implementation guidance. The final full publication is scheduled for release during the first quarter of 2008.

In case you don't know, the COSO principles are kind of best of breed when it comes to considering internal control systems, and the Public Company Accounting Oversight Board especially likes it.

1 comment:

Edith Orenstein said...

Joel, glad to find you describe COSO internal control standards as 'best of breed,' further info about the COSO Discussion Document on Monitoring Internal Control, on which the public comment deadline closes Oct. 31, can be found at www.coso.org and in the summary posted Sept. 17 in FEI's blog at www.fei.org/blog. Congratulations also on passing the CFE exam, I have thought about taking it myself. Edith Orenstein, FEI