COSO risk management
COSO risk management strategies are of immense assistance to any organization. COSO stands for Committee of Sponsoring Organizations and is a voluntary private-sector organization dedicated to improving the quality of financial reporting through business ethics, effective internal controls and corporate governance.
COSO was originally formed in 1985 to sponsor the National Commission on Fraudulent Financial Reporting, an independent private sector initiative often referred to as the Treadway Commission.
The Commission studied the causal factors that can lead to fraudulent financial reporting and developed recommendations for public companies and their independent auditors, for the Securities and Exchange Commission (“SEC” or “Commission”) and other regulators, and for educational institutions.
The sponsoring organizations are the American Institute of Certified Public Accountants (AICPA), The Institute of Internal Auditors (IIA), Financial Executives International (FEI), Institute of Management Accountants (IMA) and American Accounting Association (AAA).
COSO so far has produced two documents, one in 1992 on the Internal Controls – Integrated Framework (which is the framework of choice in the United States for purposes of complying with Section 404 of Sarbanes-Oxley), and the other in the mid1990s on derivatives.
COSO risk management process is critical to any organisation