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Executive's Guide to COSO Internal Controls: Understanding and Implementing the New Framework by Robert R. Moeller

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CHAPTER 1

Importance of the COSO Internal Control Framework

IT IS NOT A STANDARD or detailed requirement but only a framework. Some business executives may ask then, “Who or what is COSO?” In our business world of multiple rules and regulations that have been established by numerous governmental and other agencies that often use hard-to-remember acronyms, it is easy to roll our eyes or shrug our shoulders at yet another set of standards. In addition, COSO (Committee of Sponsoring Organizations) internal controls are only a framework model outlining professional practices for establishing preferred business systems and processes that promote efficient and effective internal controls. Also, the “sponsoring organizations” that issue and publish this material are neither governmental nor some other regulatory agencies. Nevertheless, the COSO internal control framework is an important set or model of guidance materials that enterprises should follow when developing their systems and procedures, as well as when establishing Sarbanes-Oxley Act (SOx) compliance.

This COSO internal control framework was originally launched in the United States in 1992, now a long time ago. This was yet another period of notable fraudulent business practices in the United States and elsewhere that identified a well-recognized need for improved internal control processes and procedures to help and guide. The 1992 COSO internal control framework soon became a fundamental element of American Institute of Certified ...

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