New coso framework

The COSO Framework!

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a leading organization in the field of internal control and enterprise risk management. In 2017, COSO released a new framework for internal control, which is widely recognized as the COSO 2017 Framework.

The COSO 2017 Framework is a comprehensive guide for organizations to design, implement, and evaluate internal controls that are effective in achieving their objectives. The framework is based on five interrelated components:

  1. Control Environment: This component focuses on the tone and culture of the organization, including the values, ethics, and integrity of the organization's leadership and employees.
  2. Risk Assessment: This component involves identifying, assessing, and prioritizing risks that could impact the organization's objectives.
  3. Event Identification: This component involves identifying and responding to events that could impact the organization's objectives, such as internal and external events, and changes in the organization's environment.
  4. Control Activities: This component involves designing and implementing controls to mitigate risks and achieve the organization's objectives.
  5. Information and Communication: This component involves designing and implementing processes for gathering, processing, and communicating information to support the organization's objectives.

The COSO 2017 Framework also includes three lines of defense:

  1. First Line of Defense: This line of defense includes the organization's management and employees who are responsible for implementing controls and achieving the organization's objectives.
  2. Second Line of Defense: This line of defense includes internal audit and other independent assurance functions that provide objective assurance and consulting services to the organization.
  3. Third Line of Defense: This line of defense includes the organization's board of directors and audit committee, which provide oversight and guidance to the organization.

The COSO 2017 Framework is widely adopted by organizations around the world and is considered a best practice for internal control and enterprise risk management.