Below is content from a press release that the Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued on May 14, 2103 on its release of an updated Internal Control-Integrated Framework and Related Illustrative Documents. The Institute of Management Accountants (IMA) is a founding organization of COSO. IMA will be hosting a webinar on July 2, 2013 to inform members about the framework. Non-members of IMA that are viewing this blog should consider joining IMA at www.imanet.org to take advantage of such benefits as viewing informative webinars that also offer CPE credit.
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) – an organization providing thought leadership and guidance on internal control, enterprise risk management, and fraud deterrence – issued today its updated Internal Control–Integrated Framework (Framework) and related illustrative documents. COSO's original Framework published in 1992 is recognized as the leading guidance for designing, implementing and conducting internal control and assessing its effectiveness.
Authored by PwC under the direction of the COSO Board, the updated Framework is expected to help organizations design and implement internal control in light of many changes in business and operating environments since the issuance of the original Framework, broaden the application of internal control in addressing operations and reporting objectives, and clarify the requirements for determining what constitutes effective internal control.
COSO also issued, today, the Illustrative Tools for Assessing Effectiveness of a System of Internal Control and the Internal Control over External Financial Reporting (ICEFR): A Compendium of Approaches and Examples. The Illustrative Tools are expected to assist users when assessing whether a system of internal control meets the requirements set forth in the updatedFramework. The ICEFR Compendium is particularly relevant to those who prepare financial statements for external purposes based upon requirements set forth in the updated Framework.
"COSO and PwC are very appreciative of the extensive and thoughtful input received from stakeholders through participation in an initial survey of potential updates, the public exposures of draft documents during 2011 and 2012, and other forums during the 2 ½ year development process," said David Landsittel , Chairman of COSO. "While our original Framework remains fundamentally sound and broadly accepted in the market place, we are confident that the 2013 Framework will bring added benefits to users."
COSO believes that users should transition their applications and related documentation to the updated Framework as soon as is feasible under their particular circumstances. As previously announced, COSO will continue to make available its original Framework during the transition period extending to December 15, 2014, after which time COSO will consider it as superseded by the 2013 Framework.
The COSO Board believes that the continued use of the original Framework during the transition period (May 14, 2013 toDecember 15, 2014) is appropriate. During this period, the COSO Board believes that organizations reporting externally should clearly disclose whether the original Framework or the 2013 Framework was utilized. COSO will also continue to make available its publication, Internal Control over Financial Reporting–Guidance for Smaller Public Companies until December 15, 2014, after which time it will no longer be available.
COSO publications are available for purchase at www.coso.org. The Framework, Illustrative Tools, and ICEFR Compendiumare available for purchase in both hard copy and electronic formats. An Executive Summary can be downloaded by the public free of charge from www.coso.org. In addition, the public exposure drafts of these publications, the related public comment letters, and other background information about the project will remain available on COSO's website through December 31, 2013.
Finally, COSO wishes to thank PwC for its outstanding contributions in developing the updated Framework and related illustrative documents, and the Advisory Council for its very thoughtful insights. PwC's consideration of input provided by many stakeholders was instrumental in preserving, clarifying and strengthening, as appropriate, COSO's original Framework.