31 Days to a More Effective Compliance Program - What is the COSO 2013 Internal Controls Framework?

Thomas Fox
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COSO was adopted in 1992 as a framework for basis to design and then test the effectiveness of internal controls. In 2010, it was deemed necessary to update this more than 20-year old COSO Framework, to provide a more supportable approach when adversarial third parties challenged whether a company has effective internal controls (such as the SEC). While the COSO 2013 Internal Controls Framework is designed for financial controls, I believe that the SEC will use this to review a company’s compliance internal controls. This means that See more +
COSO was adopted in 1992 as a framework for basis to design and then test the effectiveness of internal controls. In 2010, it was deemed necessary to update this more than 20-year old COSO Framework, to provide a more supportable approach when adversarial third parties challenged whether a company has effective internal controls (such as the SEC). While the COSO 2013 Internal Controls Framework is designed for financial controls, I believe that the SEC will use this to review a company’s compliance internal controls. This means that you need to understand what is required under the COSO 2013 Internal Controls Framework and can show adherence to it or justify an exception if you receive a letter from the SEC asking for evidence of your company’s compliance with the internal controls provisions of the FCPA.

Three key takeaways:

1. You must use the 2013 Internal Controls Framework or a similar source for your internal controls structure.

2. The 2013 Internal Controls Framework identifies the following areas: a) Control Environment, b) Risk Assessment, c) Control Activities, d) Information and Communication, and e) Monitoring.

3. Your internal controls must be sustainable. See less -

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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