It’s one thing to build solid internal controls, but quite another to have a system in place to monitor those controls on a regular basis. While many companies do the former, not enough are good at the latter. That’s the core take-away behind the latest release from COSO, the Committee of Sponsoring Organizations of the Treadway Commission. The recently released exposure draft, Guidance on Monitoring Internal Control Systems, was developed in cooperation with a team of partners at Grant Thornton LLP.
“Companies need more insight into how to become much more efficient and cost effective in maintaining internal controls,” says COSO chairman Larry Rittenberg, adding that the draft was developed after COSO members observed that some public companies monitor their internal controls over financial reporting just once a year, in order to comply with Section 404 of the Sarbanes-Oxley Act. “Companies should monitor their controls every day through ordinary operations, to make sure those controls [are] operating effectively,” Rittenberg explains. The proposed guidance provides practical guidance and concrete examples of using the monitoring component of the COSO internal control framework to develop effective and efficient internal controls. “Once you establish good internal controls you ought to think of how to maintain them,” Rittenberg adds.
Sign In
Sign In
Copyright © 2024 ALM Global, LLC. All Rights Reserved.