The Committee of Sponsoring Organizations of the Treadway Commission (COSO) released guidance designed to help organizations better monitor the effectiveness of their internal control systems and to take swift corrective action if needed.
The guidance, developed by COSO in a project led by a Grant Thornton LLP team, recognizes that while many organizations effectively monitor their internal control, some fail to take full advantage of the information gathered. In other cases, routine monitoring is not as effective as it could be, resulting in additional testing at or near year-end. An improved approach to monitoring implementation can enhance the efficiency and effectiveness of internal control, in many cases at lower overall costs to the organization, COSO said in a statement.
COSO released three volumes and a free four-page introduction. “Volume I: Guidance” presents the fundamental principles of effective monitoring, linking to COSO’s Internal Control—Integrated Framework. “Volume II: Application” discusses in greater detail the principles outlined in Volume I and provides guidance to those responsible for implementing effective monitoring. “Volume III: Examples” provides case studies of internal control monitoring.
“The guidance is presented in a way that encourages adaptation to individual organizational circumstances, and helps readers understand that effective monitoring is both risk based and principles based,” COSO Chairman Larry Rittenberg said in a press release.