COSO.

• Author: Orenstein, Edith
• Position: FEI TECHNICAL COMMITTEES - Committee of Sponsoring Organizations of the Treadway Commission

Staff Liaison: Edith Orenstein eorenstein@financialexecutives.org

An Exposure Draft (ED) of proposed guidance on Monitoring Internal Control was anticipated to be released by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in June. Monitoring is one of the five core components of COSO's Internal Control-Integrated Framework (that was originally published in 1992).

The framework was supplemented and clarified in 2006 by the addition of 20 general principles; the 20 principles are contained in COSO's Guidance for Smaller Public Companies, which can be applied by companies of all sizes.

The purpose of COSO's proposed guidance on Monitoring is twofold:

1) To assist companies that have effective monitoring to better leverage the results of their monitoring efforts for purposes of, e.g., internal control assessments under the Sarbanes-Oxley Act (public companies), AICPA standards (private companies), for internal purposes and to make monitoring more efficient and effective. For such companies, the guidance encourages companies to consider the overall tradeoffs in cost/benefit in balancing their own monitoring efforts with the efforts of their external auditors, to improve the overall efficiency and effectiveness of the companies' and their auditors' internal control-related efforts...