Guidance shows how to strengthen the integrity of the financial reporting chain
Grant Thornton LLP (U.S.), announced, in conjunction with The Committee of Sponsoring Organizations of the Treadway Commission (COSO), the release of Guidance on Monitoring Internal Control Systems. The Guidance─developed by COSO and authored by a Grant Thornton team led by U.S. National Managing Partner of Corporate Governance Trent Gazzaway with members from Grant Thornton LLP (Canada) and Raymond Chabot Grant Thornton LLP (Canada)─is designed to help organizations to better monitor internal control of financial systems and to take timely corrective actions with respect to problems in the reporting processes.
“Effective monitoring helps ensure that internal control continues to operate effectively,” said Denis Posten, Partner, with Grant Thornton LLP (Canada). “Many organizations are not fully utilizing the monitoring component of internal controls. Businesses can adapt this Guidance and improve controls and reduce the costs.”
The Guidance, comprising three volumes, illustrates examples of effective prevention and monitoring of weaknesses in design and operation of internal controls. Volume I: Guidance presents the fundamental principles of effective monitoring, linking to COSO’s Internal Control — Integrated Framework. Volume II: Application conveys in greater detail the principles outlined in Volume I and provides guidance to those responsible for implementing effective monitoring. Volume III: Examples provides case studies of internal control monitoring.
“During an economic downturn, when confidence in the financial sector is low, companies need to look at their internal financial reporting processes and proactively implement corrective measures, to mitigate risk, improve governance and ensure the accuracy of financial statements,” said John S. Cochrane, Delegate Partner, Assurance, with Raymond Chabot Grant Thornton LLP (Canada).
COSO engaged Grant Thornton in January 2007 to lead the development of the project after concluding there was a need for more guidance on effectively monitoring internal controls, as well as complying with the U.S. Sarbanes-Oxley Act of 2002 (SOX). The oversight task force consisted of representatives from COSO's five sponsoring organizations and other experts; participants from the U.S. Government Accountability Office; and representatives from audit firms and both large and small companies; as well as project observers from the SEC and the PCAOB. The project was exposed for public comment before final publication.
The introduction can be downloaded for free from COSO’s Web site at www.coso.org. The Guidance is available both in electronic and hard-copy format and can be purchased at http://www.cpa2biz.com/search/results.jsp.
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About Grant Thornton International Ltd
Grant Thornton LLP is a Canadian member firm of Grant Thornton International Ltd (Grant Thornton International). Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered by the member firms independently.
Originally formed in 1985 to sponsor the National Commission on Fraudulent Financial Reporting, COSO is a voluntary private sector organization dedicated to improving the quality of financial reporting through business ethics, effective internal controls, and corporate governance. COSO comprises the American Accounting Association (AAA), the American Institute of Certified Public Accountants (AICPA), Financial Executives International (FEI), the Institute of Management Accountants (IMA), and The Institute of Internal Auditors (IIA). www.coso.org
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