The Committee of Sponsoring Organizations of the Treadway Commission has released for public comment an updated version of its internal control framework in response to changes in the business environment and their associated risks.
The updated framework was produced by the committee, also known as COSO, in consultation with PricewaterhouseCoopers. COSO originally engaged PwC in 1992 to develop an integrated framework for internal control and has worked with the firm to update it to address the increasing complexity and pace of change at organizations.
A wide range of professionals from industry, academia, government agencies, and nonprofit organizations have provided perspective to COSO and PwC on how the original framework can be updated. The new framework retains the core definition of internal control and the five components of a system of internal control. One of the most significant changes is the codification of internal control concepts in the original framework into 17 principles and their supporting attributes to help organizations apply their judgment in managing risk and improving performance in an increasingly complex and changing environment.
“Issued in 1992, the COSO Internal Control-Integrated Framework has become the most widely used internal control framework in the world,” said COSO chairman David L. Landsittel in a statement. “The key concepts proposed in our original framework are timeless, yet the changes we have seen in the business and operating environments have driven the need for this update. The update should allow organizations to more effectively utilize the framework to develop and maintain systems of internal control in support of their long-term success.”
The comment period on the updated framework ends March 31, 2012, and it will be revised as necessary. Release of the final framework is expected in next fall.
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