GRC & Fraud Software Journal
A trio of top accounting experts have endorsed the COSO Internal Control Integrated Framework (COSO ICIF) standard to improve corporate confidence in reporting performance data to capital markets.
The authors – Robert Herz, board member, Sustainability Accounting Standards Board Foundation and former chairman of the Financial Accounting Standards Board; Jeff Thomson, president and CEO of the Institute of Management Accountants; and Brad Monterio, sustainability expert with Colcomgroup – argue in a new paper that leveraging COSO ICIF ensures companies communicate reliable data.
The paper argues that using the robust and globally recognized framework provides the greatest confidence and accuracy for communicating reliably to capital markets.
“Confidence in the accuracy, timeliness and relevance of performance data is critical to effectively optimizing corporate activities and communicating reliably to the capital markets,” says Herz. “In the financial reporting ecosystem, confidence is bolstered in part by the implementation and application of effective, integrated internal controls – controls established using the Framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Originally created in 1992 and refreshed in 2013, the framework aims to enable organizations to effectively and efficiently develop and maintain systems of internal control. The Framework enhances the likelihood of achieving the entity’s objectives and ability to adapt to changes in the business and operating environments.
It emphasizes the importance of management judgment in designing, implementing, and conducting internal control, and in assessing the effectiveness of a system of internal control. The authors believe that “the COSO principles on effectiveness – controls that are present, functioning, and integrated – could apply to all types of performance data, including sustainability information, using professional judgment.”