With the COSO’s 1992 Control Framework being superseded by the 2013 updated edition on December 15, 2014, now is the time for companies to use the updated framework to evaluate the effectiveness of their systems of internal control over financial reporting.
In 1992, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) published Internal Control — Integrated Framework, which gave organizations guidance for designing, operating, and evaluating their systems of internal control over financial reporting (ICFR). That publication will be superseded by an updated edition on December 15, 2014, and many U.S. public companies are already well on their way to transitioning — a process made easier by the fact that the core concepts for effective ICFR are not fundamentally different from those set forth in the original edition. The updated framework formalizes 17 principles that stipulate more granular evaluative criteria to help a company’s management assess the design and operating effectiveness of its ICFR. And to meet the requirement that calls for evaluation of whether each principle is present and functioning, senior managers at leading companies are taking a fresh look at how their existing controls support the 17 principles.
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