COSO Plan Adoption
This paper will focus on how organizations can benefit from adopting the committee of Sponsoring Organizations of the Tread way Commission’s structure for their own corporate compliance plan. The framework of COSO is the most widely used framework in the US, and is also widely used around the world. It provides reasonable assurance, and is geared for the achievement of objectives related to operations, compliance, and financial reporting. Under these objectives, are five components of internal control that have an additional 17 principles that are embedded into the framework of what is known as the COSO cube. Most organizations can benefit from these principles when structuring their own Corporate Compliance Plan. Two of the most important components are Control environment and Risk-Management. Control Environment
Control environment establishes structure, authority, and responsibility within an organization. It demonstrates commitment to integrity and ethical values at all levels within an organization. It exercises oversight responsibility and enforces accountability at the highest level, and it demonstrates commitment to competence as it adapts to changing business needs. Risk Assessment
The main reason to adopt the COSO guidance is to learn how an organization can go from a risk-management initiative, to their final objective of having an ERM process. It can take an organization from an informal risk management to an ERM with specific tangible actions that organizations can use to get started. COSO’s risk-management guidance has two keys to success which are the initial action steps, and the continuing ERM implementation. The most powerful recommendation would be the use of “Key Risk Indicators” to strengthen Enterprise Risk Management within an organization. Organizations will be able to use forward-looking key risk indicators, to compliment key performance indicators to further enhance ERM. KRIs enables management to deal with risk...
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