December 15 will be here before we know it. The updated COSO Internal Control – Integrated Framework already has been out for more than a year. For those companies with fiscal year-end dates beginning on or after December 15, 2014, COSO recommends transitioning to the updated 2013 framework. Thus, calendar year reporting companies should transition in 2014. While some companies are deferring the transition to the following year, most companies are proceeding with their transition process. Those companies that decide to defer must consider how they will disclose their use of the 1992 framework; these companies run the risk of possibly receiving a comment letter from the SEC staff.
A recent issue of Board Perspectives: Risk Oversight gives six good reasons why directors should care about COSO’s updated framework.
Internal controls have always been important to the success of any company, as they provide reasonable assurance that risks to the achievement of objectives are reduced to an acceptable level. That is why they are important to the governance process.
You’ll find the newsletter and Protiviti’s The Updated COSO Internal Control Framework: Frequently Asked Questions on our website. I encourage you to subscribe to Board Perspectives: Risk Oversight, register for upcoming webinars of interest and share your thoughts in this forum.
Note that the Board Perspectives: Risk Oversight article is also available on my blog for the National Association of Corporate Directors: www.directorship.com/author/jim-deloach.