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COSO Updates Its Internal Control Framework
Practical Law Legal Update 1-529-3525 (Approx. 3 pages)
COSO Updates Its Internal Control Framework
by PLC Corporate & Securities
| Published on 15 May 2013 • USA (National/Federal) |
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued its updated Internal Control - Integrated Framework and related illustrative documents.
On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released its updated Internal Control - Integrated Framework (Updated Framework) and related illustrative documents. The Framework was first published in 1992 (Original Framework) and is the leading guidance for designing, implementing and conducting internal control and assessing its effectiveness. COSO updated the Original Framework to:
- Account for the many changes in business and operating environments since the Original Framework was issued.
- Broaden the application of internal control in addressing operations and reporting objectives.
- Clarify the requirements for determining what constitutes effective internal control.
The purpose of the related illustrative documents is to help users assess whether a system of internal control meets the requirements of the Updated Framework.
COSO suggests that users should transition their applications and related documentation to reflect the Updated Framework as soon as is feasible. However, COSO will continue to support the Original Framework during a transition period from May 14, 2013 to December 15, 2014, after which time the Original Framework will be superseded by the Updated Framework. The COSO board suggests that, during the transition period, companies reporting externally should disclose whether they utilized the Original Framework or the Updated Framework.
To learn more about the Updated Framework, see COSO's press release and executive summary.