COSO POSTPONES INTERNAL CONTROL FRAMEWORK
New York -- The Committee of Sponsoring Organizations of the Treadway Commission, also known as COSO, plans to release the updated version of its Internal Control Integrated Framework in the first quarter of 2013, instead of the fall of 2012. This will be the first update of the framework since 1992 and will take into account new factors, such as the Web and mobile technology.
The public comment period officially ended on March 31, and the COSO board of directors and its advisory council have been considering the many comments they have received to date on the draft version of the framework.
"We got about 100 comment letters, and the comments are very thoughtful," said COSO chairman David Landsittel in an interview. "The stakeholders that provided those comments obviously did a good job in thoroughly thinking through what they wanted to express. We don't want to be under pressure in terms of rushing to judgment as to how we address those comments. We looked at our timetable and we concluded we could and should push back the target date for issuance to the first quarter of 2013."
Another reason for the delay, he explained, was that several stakeholders were concerned about the original target issuance date of late 2012. They asked whether they would need to immediately transition into using the new framework for their 2012 reporting for public companies under Sarbanes-Oxley. "Our intent would be never to presume that instantaneous transition is required, but we thought that going back to the first quarter of 2013 takes the pressure off that issue," said Landsittel. "That gives people more time who are on a calendar-year company basis."
Landsittel noted that with the new framework, the definition would not change, and neither would the five components of the framework that make up an adequate system of internal control. "We have developed a series of principles that put more structure as to what it means to comply with each of the five components," he said.
TWEEDIE WARNS ON IFRS
New York -- Sir David Tweedie, the former chairman of the International Accounting Standards Board, said in late April that the Securities and Exchange Commission needs to make a decision soon on committing to International Financial Reporting Standards, or other major countries could drop their support.
At a panel discussion at the American Institute of CPAs' offices in New York, co-sponsored by the AICPA and the Institute of Chartered Accountants of Scotland, over which Tweedie now presides, he warned that Japan, India and China are now hesitating to commit to IFRS after watching the SEC repeatedly delay. "You have such a huge impact," he said. "The SEC and [former SEC chair] Arthur Levitt shaped the vision for the IASB." He noted that a U.S. presence is also still needed on the international Monitoring Board of financial regulators overseeing the IASB. "We need the U.S. on the Monitoring Board to say no," he said.
Tweedie also cautioned that with two U.S. members of the IASB nearing the end of their terms, the U.S. would lose influence over the shape of IFRS.
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