...The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a joint initiative of five private sector organizations dedicated to providing thought leadership to executive management and governance entities on critical aspects of organizational governance, business ethics, internal control, enterprise risk management, fraud, and financial reporting. COSO has established a common internal control model against which companies and organizations may assess their control systems. The COSO framework defines internal control as a process, effected by an entity's board of directors, management and other personnel, designed to provide "reasonable assurance" regarding the achievement of objectives in the following categories: * Effectiveness and efficiency of operations * Reliability of financial reporting * Compliance with applicable laws and regulations. * Safeguarding of Assets (MHA) The COSO framework involves several key concepts: * Internal control is a process. * Internal control is affected by people. * Internal control can be expected to provide only reasonable assurance, not absolute assurance, to an entity's management and board. * Internal control is geared to the achievement of objectives in one or more separate but overlapping categories. COSO internal control framework consists of five interrelated components derived from the way management runs a business. These components provide an effective framework for describing...
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...requesting AICPA permission is to first display our Website homepage on the Internet at www.aicpa.org, then click on the "privacy policies and copyright information" hyperlink at the bottom of the page. Next, click on the resulting copyright menu link to COPYRIGHT PERMISSION REQUEST FORM, fill in all relevant sections of the form online, and click on the SUBMIT button at the bottom of the page. A permission fee will be charged for th e requested reproduction privileges. Committee of Sponsoring Organizations of the Treadway Commission (COSO) Oversight COSO Chair American Accounting Association American Institute of Certified Public Accountants Financial Executives International Institute of Management Accountants The Institute of Internal Auditors Representative John J. Flaherty Larry E. Rittenberg Alan W. Anderson John P. Jessup Nicholas S. Cyprus Frank C. Minter Dennis L. Neider William G. Bishop, III David A. Richards Project Advisory Council to COSO Guidance Tony Maki, Chair Partner Moss Adams LLP James W. DeLoach Managing Director Protiviti Inc. John P. Jessup Vice President and Treasurer E. I. duPont de Nemours and Company Tony M. Knapp Senior Vice President and Controller Motorola, Inc. Douglas F. Prawitt Professor Brigham Young University Mark S. Beasley Andrew J....
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...financial reporting? Fraudulent financial reporting can cause vital consequences for the organization and its stakeholders. Fraud affected different sizes of companies. Unfortunately, the affected sizes of companies became larger than COSO’s 1999 study. The larger sizes of companies be affected, the more people involve in the fraud. The COSO Fraudulent Financial Reporting also states, “once fraud is initiated in one financial period, management often continues to perpetrate fraud in each quarterly and annual financial statement filing for about two years.” The longer period of time of fraud involves will cause more seriously consequences in the future. Thus, both large sizes and longer period happen at the same time will largely increase misstatement or misappropriation. 2. Who are the perpetrators? The perpetrator from the most frequently named to the least in an AAER: CEO, CFO, CEO and CFO, controller, COO, other Vice Presidents, and other titles. 3. What is happening with corporate governance? There are not significant differences of board governance characteristics between fraud and non-fraud firms. COSO gathered a sample of 203 no-fraud companies that is similar to 203 fraud companies to make a comparison. Because lack of notable statistical differences in many of the governance characteristics, many board of director characteristics are not significantly differ between fraud and non-fraud firms. 4. Are auditors doing a good job? Auditors...
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...Committee of Sponsoring Organizations (COSO) I would encourage you to go to the web site: http://www.coso.org/aboutus.htm and read more about COSO. * “About Us” gives a history of COSO, some of which is excerpted in the screen shots below. * Under “Guidance” you will find free executive summaries of some of the key studies COSO has done over the years. Click on the headings for “Enterprise Risk Management” “Internal Controls” or “Fraud Deterrence” and then click on “More” after the brief summary to get the executive summary of the study. I have attached the Executive Summary for Integrated Framework (1992) as a Reading Following this posting. * Under “Newsroom” and “Home” you will find descriptions of current COSO activities. COSO was an attempt by the private sector to do what congress did with SOX. At present, companies have guidance from COSO and regulatory requirements from SOX that are sometimes overlapping and sometimes in conflict. COSO was organized in 1985 to sponsor the National Commission on Fraudulent Financial Reporting, an independent private-sector initiative that studied the causal factors that can lead to fraudulent financial reporting. It also developed recommendations for public companies and their independent auditors, for the SEC and other regulators, and for educational institutions. The National Commission was sponsored jointly by five major professional associations headquartered in the United States: the American Accounting...
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...Internal Control - Integrated Framework Executive Summary Senior executives have long sought ways to better control the enterprises they run. Internal controls are put in place to keep the company on course toward profitability goals and achievement of its mission, and to minimize surprises along the way. They enable management to deal with rapidly changing economic and competitive environments, shifting customer demands and priorities, and restructuring for future growth. Internal controls promote efficiency, reduce risk of asset loss, and help ensure the reliability of financial statements and compliance with laws and regulations. Because internal control serves many important purposes, there are increasing calls for better internal control systems and report cards on them. Internal control is looked upon more and more as a solution to a variety of potential problems. Internal Control Internal control means different things to different people. This causes confusion among businesspeople, legislators, regulators and others. Resulting miscommunication and different expectations cause problems within an enterprise. Problems are compounded when the term, if not clearly defined, is written into law, regulation or rule. This report deals with the needs and expectations of management and others. It defines and describes internal control to: 1. Establish a common definition serving the needs of different parties. 2. Provide a standard against which business and other entities--large...
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...requesting AICPA permission is to first display our Website homepage on the Internet at www.aicpa.org, then click on the "privacy policies and copyright information" hyperlink at the bottom of the page. Next, click on the resulting copyright menu link to COPYRIGHT PERMISSION REQUEST FORM, fill in all relevant sections of the form online, and click on the SUBMIT button at the bottom of the page. A permission fee will be charged for th e requested reproduction privileges. Committee of Sponsoring Organizations of the Treadway Commission (COSO) Oversight COSO Chair American Accounting Association American Institute of Certified Public Accountants Financial Executives International Institute of Management Accountants The Institute of Internal Auditors Representative John J. Flaherty Larry E. Rittenberg Alan W. Anderson John P. Jessup Nicholas S. Cyprus Frank C. Minter Dennis L. Neider William G. Bishop, III David A. Richards Project Advisory Council to COSO Guidance Tony Maki, Chair Partner Moss Adams LLP James W. DeLoach Managing Director Protiviti Inc. John P. Jessup Vice President and Treasurer E. I. duPont de Nemours and Company Tony M. Knapp Senior Vice President and Controller Motorola, Inc. Douglas F. Prawitt Professor Brigham Young University Mark S. Beasley Andrew J. Jackson...
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...COSO报告 出自 MBA智库百科(http://wiki.mbalib.com/) 目录 • 1 COSO报告概述 • 2 COSO报告中内部控制的组成 • 3 COSO报告中内部控制的职责 • 4 COSO报告的现实意义 • 5 COSO报告的局限性 • 6 COSO报告对我国企业的启示 COSO报告概述 COSO是全国虚假财务报告委员会下属的发起人委员会（The Committee of Sponsoring Organizations of The National Commission of Fraudulent Financial Reporting）的英文缩写。根据萨班斯法案第404节条款以及美国证券交易委员会（SEC）的相应实施标准，要求公众公司的管理层评估和报告公司最近年度的财务报告的内部控制的有效性。2004年3月9日，PCAOB发布了其第2号审计标准：“与财务报表审计相关的针对财务报告的内部控制的审计”，并于6月18日经SEC批准。SEC对该标准的认同等于从另外一个侧面承认了1992年COSO公布的《内部控制—综合框架》（也称“COSO内部控制框架”）。这也表明COSO框架已正式成为美国上市公司内部控制框架的参照性标准。 1992年Treadway委员会经过多年研究，针对公司行政总裁、其他高级执行官、董事、立法部门和监管部门的内部控制进行高度概括，发布《内部控制一整体框架》（Interna Control－Integrated Framework）报告，即通称的COSO报告。该报告第一部分是概括；第二部分是定义框架，完整定义内部控制，描述它的组成部分，为公司管理层、董事会和其他人员提供评价其内部控制系统的规则；第三部分是对外部团体的报告；是为报告编制报表中的内部控制的团体提供指南的补充文件；第四部分是评价工具，提供用以评价内部控制系统的有用材料。 COSO报告提出内部控制是用以促进效率，减少资产损失风险，帮助保证财务报告的可靠性和对法律法规的遵从。COSO报告认为内部控制有如下目标：经营的效率和效果（基本经济目标，包括绩效、利润目标和资源、安全），财务报告的可靠性（与对外公布的财务报表编制相关的，包括中期报告、合并财务报表中选取的数据的可靠性）和符合相应的法律法规。 [编辑] COSO报告中内部控制的组成 1.控制环境（Control environment） 它包括组织人员的诚实、伦理价值和能力；管理层哲学和经营模式；管理层分配权限和责任、组织、发展员工的方式；董事会提供的关注和方向。控制环境影响员工的管理意识，是其他部分的基础。 2.风险评估（risk assessment） 是确认和分析实现目标过程中的相关风险，是形成管理何种风险的依据。它随经济、行业、监管和经营条件而不断变化，需建立一套机制来辨认和处理相应的风险。 3.控制活动（control activities） 是帮助执行管理指令的政策和程序。它贯穿整个组织、各种层次和功能，包括各种活动如批准、授权、证实、调整、经营绩效评价、资产保护和职责分离等。 4.信息和交流（information and communication） 信息系统产生各种报告，包括经营、财务、守规等方面，使得对经营的控制成为可能。处理的信息包括内部生成的数据，也包括可用于经营决策的外部事件、活动、...
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...Helen Valentine ACCT 3222 Sec. 01 October 18, 2011 The COSO Framework Due to questionable corporate political campaign finance practices and foreign corrupt practices in the mid -1970s, the U.S. Securities and Exchange Commission (SEC) and the U.S. Congress enacted campaign finance law reforms and the 1977 Foreign Corrupt Practices Act (FCPA) which criminalized transnational bribery and required companies to implement internal control programs. In response, the Treadway Commission, a private-sector initiative, was formed in 1985 to inspect, analyze, and make recommendations on fraudulent corporate financial reporting. The Treadway Commission studied the financial information reporting system over the period from October 1985 to September 1987 and issued a report of findings and recommendations in October 1987, Report of the National Commission on Fraudulent Financial Reporting. As a result of this initial report, the Committee of Sponsoring Organizations (COSO) was formed and it retained Coopers & Lybrand, a major CPA firm, to study the issues and author a report regarding an integrated framework of internal control. In September 1992, the four volume report entitled Internal Control— Integrated Framework was released by COSO and later re-published with minor amendments in 1994. This report presented a common definition of internal control and provided a framework against which internal control systems may be assessed and improved. This report is one standard that...
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...The Development of COSO Frameworks and Guidance Yongheng Wang Kellstadt Graduate School of Business, DePaul University Abstract Fraudulent financial reporting has always been a crucial issue in business operation. Sometimes companies could report fraudulent financial statements to conceal true information and benefit from questionable transactions. Investors and shareholders would not be able to obtain useful information to make business decisions if financial information failed to reflect business operation and the company’s financial status. Broadly, the market would hurt due to the negative impact on the market efficiency. As a result, COSO, the Committee of Sponsoring Organizations of the Treadway Commission, was formed in 1985. It has published several comprehensive frameworks to help organizations to improve business operation and governance and to avoid fraud. The aim of this report was to study the development of COSO, including its history and main frameworks and guidance regarding internal control, enterprise risk management and fraud deterrence. The report interpreted the three areas under COSO framework with their key compositions and most recent updates. After the detailed interpretation, conclusion and recommendations were given. Keywords: Fraudulent Financial Reporting, COSO, Internal Control, ERM, Fraud Introduction and Background Financial information is a significant and unique composition of the world of business. Analysis on financial...
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...ORGANIZATIONS OF THE TREADWAY COMMISSION (COSO) Introduction The Committee of Sponsoring Organizations of the Treadway Commission was organized in 1985 and was jointly sponsored by five professional organizations, American Accounting Association (AAA), American Institute of CPA (AICPA), the Institute of Internal Auditors (IIA) , the Association of Accountants and Financial Professionals in Business (IMA), and Financial Executives International (FEI). Each sponsoring organization appoints representatives to periodically work together on specific projects. The goal of COSO is to provide leadership through the development of frameworks and guidance on enterprise risk management, internal control and fraud deterrence to enhance organizational governance and decrease fraud 1. The History of COSO and the Creation of the COSO Framework Due to the public criticisms against both accounting professionals and the U.S. Securities and Exchange Commission (SEC), the Treadway Commission was formed in 1985 to inspect fraudulent financial statements, especially in the aspects of reliability and accuracy. In 1987, the Treadway Commission issued its first report on fraudulent financial reporting. COSO was created because of this report. In 1992, COSO released the report titled Internal Control-Integrated Framework, which defined the concept of internal control and established a framework on how to make internal control systems work effectively. The 1992 COSO framework contains the following...
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...COSO – INTERNAL CONTROL FRAMEWORK * Internal control structure * Auditor’s assessment of risk * The planning of audit procedures COSO – INTERNAL CONTROL FRAMEWORK * Internal control structure * Auditor’s assessment of risk * The planning of audit procedures RISK ASSESSMENT RISK ASSESSMENT CONTROL ACTIVITIES CONTROL ACTIVITIES MONITORING MONITORING CONTROL ENVIRONMENT CONTROL ENVIRONMENT INFORMATION & COMMUNICATION INFORMATION & COMMUNICATION * Role of the BOD and senior management * Integrity and ethical values of management * Management policies and philosophy * Organizational structure * Policies and practices managing human resources * Performance evaluation measures * External influences * Role of the BOD and senior management * Integrity and ethical values of management * Management policies and philosophy * Organizational structure * Policies and practices managing human resources * Performance evaluation measures * External influences * Policies and procedures to ensure that the appropriate actions are taken in response to identified risks * IT Controls (computer environment) * Physical Controls (human activities) * Policies and procedures to ensure that the appropriate actions are taken in response to identified risks * IT Controls (computer environment) * Physical Controls (human activities) * A process that access the quality of internal...
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...Analysis of the WorldCom Internal Control Using the COSO Model The control environment 1. Integrity and ethical values Integrity and ethical values are the product of the entity’s ethical and behavioral standards, as well as how they are communicated and reinforced in practice. They include management’s actions to remove or reduce incentives and temptations that might prompt personnel to engage in dishonest, illegal, or unethical acts. They also include the communication of entity values and behavioral standards to personnel through policy statements, codes of conduct, and by example. In WorldCom, integrity and ethical values are absolutely abused. Specifically, Ebbers created a culture in which the legal function was less influential and less welcome than in a healthy corporate environment. He even did not include the company’s lawyers in his inner circle and appears to have dealt with them only when he felt it necessary. He let them know his displeasure with them personally when they gave advice-however justified-that he did not like. Under these special environment, Sullivan assured that they were not doing anything illegal and that he would take full responsibility for their actions. But actually, they were doing illegal actions totally. In addition, WorldCom’s growth through acquisitions led to a hodgepodge of cultures and people. These different cultures produced different ethical values that made the environment more complicated. Recommendations: If Ebbers...
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...Homework – COSO Framework, Internal Controls and Security Internal control systems have five components: (a) control environment, (b) risk assessment, (c) control activities, (d) information and communication, and (e) monitoring. For each of the following items, indicate which component is being applied. Explain your answer! 1) The firm prints and distributes to all employees a copy of the firm’s policies and procedures. Information and communication. Provide policy information in detail to allow proper classification and reporting. 2) An internal audit committee is formed. Monitoring. To form committee is to reflect the firm’s operations. 3) Internal auditors perform a bank reconciliation as part of their audit of cash control operations. (Typically a bank reconciliation is performed by a clerk in the treasury department) Control activities. Auditors are doing internal control via operations. This is detailed control activities. 4) The firm creates a code of ethics. Control environment. Management integrity and ethical values. 5) Internal auditors test whether a computer hacker can break into the firm’s computers. Risk assessment. Braking computers is high risk, must be prevented. 6) The company determines the consequences if a warehouse is destroyed (e.g., by fire). Risk assessment. Destroyed warehouse is physical risk. 7) An employee is fired for embezzling funds. This fact is announced in a company...
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...In regards to the updating of the IT system for the purpose of storing and retrieving information, six areas of risk requiring COSO compliance emerge. The six areas are the proper implementation and maintenance of the new system, the security of the sensitive identity and financial information that is stored on the system, a proper backup security and access methods in the case of a system failure, proper access to the information for the clients and those doing authorized business on a client's behalf, and timely and effective communication to all clients regarding any change to the operation of the system or any threat or potential threat to sensitive information held by company. The first area of risk that must be addressed is the implementation and use of the new IT system. In order to establish and maintain environment control, the board of...
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...this paper should not be considered substitute for the services of such advisors, nor should it be used as a basis for any decision or action that may affect your organization. Authors Deloitte & Touche LLP Principal Contributors Dr. Patchin Curtis Director, Deloitte & Touche LLP Mark Carey Partner, Deloitte & Touche LLP COSO Board Members David L. Landsittel COSO Chair Marie N. Hollein Financial Executives International Douglas F. Prawitt American Accounting Association Chuck E. Landes American Institute of CPAs (AICPA) Richard F. Chambers The Institute of Internal Auditors Sandra Richtermeyer Institute of Management Accountants Preface This project was commissioned by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which is dedicated to providing thought leadership through the development of comprehensive frameworks and guidance on enterprise risk management, internal control, and fraud deterrence designed to improve organizational performance and governance and to reduce the extent of fraud in organizations. COSO is a private-sector initiative jointly sponsored and funded by the following organizations: American Accounting Association (AAA) American Institute of CPAs (AICPA) Financial Executives International (FEI)...
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