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Are You Ready? Implementing COSO’s Updated Internal Control Framework


Sponsored by BlackLine

With the transition deadline to move to the COSO Framework 2013, companies may wonder what to do if that hasn’t been completed and any possible ramifications.

 

Although companies have been given a 19-month transition period to move from the original Integrated Control – Integrated Framework (the “1992 Framework”) to the “2013 Framework”, as published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the December 15, 2014 transition date is quickly approaching and some companies may be wondering what needs to be done if they haven’t already completed the transition, and what, if any, the ramifications might be.

In order to be in compliance with the Section 404 internal controls provisions of the Sarbanes-Oxley Act, companies must adopt a “suitable framework” for management to evaluate internal controls as required by Rule 13a-15 under the Securities Exchange Act of 1934. Although the COSO Framework is not mandatory, it is common for companies to reference it in Management’s Report on Internal Control Over Financial Reporting, as well as the independent auditor’s attestation.

The COSO Framework was updated to provide clarification around current effective internal controls and address overall changes in the business environment, such as enhanced risk oversight and operations, as well as technology developments since the original Framework was created in 1992.

To date, the Securities and Exchange Commission has not specifically stated that the 2013 COSO Framework is the only acceptable framework for 404(a) purposes, nor have they issued any specific guidance around the transition. Paul Beswick, the SEC’s Chief Accountant said, "SEC staff plans to monitor the transition for issuers using the 1992 framework to evaluate whether, and if any, staff or Commission actions become necessary or appropriate at some point in the future.” Although there hasn’t been much emphasis by SEC staff to date, upcoming filings of Management Reports will most likely draw attention to this and cause them to question whether a company is in compliance with Section 404 if they are still using the 1992 Framework.

Join FEI and BlackLine on December 16th at 11:00AM PST for a webinar, “Are You Ready? Implementing COSO’s Updated Internal Control Framework” featuring insights from Bob Hirth, COSO Chairman, best practices and lessons learned from Michael Rose, Partner, Northeast Region, Grant Thornton LLP, and an overview of how financial management software can simplify the mapping, documenting and testing activities from Susan Parcells, Director of Finance Transformation, BlackLine.

 

Register for the webcast today!