Proposed Changes to Internal Control Guidelines

April 2012

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued an exposure draft in December 2012 which contained proposed updates to the internal control framework they previously issued in 1992.  The COSO framework provides guidance to organizations on how to design and maintain an effective system of internal control.  The update seeks to address the significant changes in business, operations, and technological environments that have occurred since the original COSO release.

The draft does not change the 5 core objectives of the original internal control framework.  It specifies several guiding principles within those core objectives providing clarity for users in the design and development of systems of internal control.  The updated principles address areas such as: governance oversight, use of and reliance on evolving technologies, fraud prevention and detection, changes in business models, and globalization of markets and operations. 

A public comment period ended March 31, 2012, and the final updated framework is expected to be released in early 2013. For more detailed information, the draft and public comments can be found here.

For additional information and guidance on applying the new revenue recognition standards, please contact Carl Chatto or your BNN advisor at 1.800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.  If you would like to discuss these matters further, please call Matt Vasil or your BNN professional at 1-800-244-7444.

Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.  Please contact us if you wish to have formal written advice on this matter.