Coso Risk Management Plan
COSO Risk Management Plan
LAW/531 BUSINESS LAW
March 18, 2013
Nicole Harrison
COSO Learning Activity
Beasley, Hancock and Branson (2009) have mentioned that “Many senior executives and their organization’s board of directors are working to strengthen risk oversight so that they are better informed about emerging risk exposures, particularly those impacting strategy” (p. 01). This statement clarifies that companies are looking for better ways to manage risk and they are using techniques to help achieving this goal. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is an organization leading the way on providing frameworks and guidance on enterprise risk management, internal control and fraud deterrence designed to improve organizational performance and governance and to reduce the extent of fraud (COSO, 2013). It is a joint initiative of five private sector organizations including the American Accounting Association, the American Institute of CPAs, the Financial Executives International, the Association of Accountants and Financial Professionals in Business and the Institute of Internal Auditors. This paper has the objective of identify recommendations about how it would be useful for an organization to adopt COSO as the structure for its own corporate compliance plan. According to Steinberg (2011) “In recent years, to complement the use of key performance indicators, which focus primarily on past performance, more organizations have adopted forward-looking key risk indicators to further enhance risk management effectiveness” (p. 01). Corporations monitor their performance based on indicators (KPIs) that provide a trend from a time in the past to date. This performance trend can be compared to others, such as competitors and general industry performance to assume how the business is moving ahead. But that is not enough.
LAW/531 BUSINESS LAW
March 18, 2013
Nicole Harrison
COSO Learning Activity
Beasley, Hancock and Branson (2009) have mentioned that “Many senior executives and their organization’s board of directors are working to strengthen risk oversight so that they are better informed about emerging risk exposures, particularly those impacting strategy” (p. 01). This statement clarifies that companies are looking for better ways to manage risk and they are using techniques to help achieving this goal. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is an organization leading the way on providing frameworks and guidance on enterprise risk management, internal control and fraud deterrence designed to improve organizational performance and governance and to reduce the extent of fraud (COSO, 2013). It is a joint initiative of five private sector organizations including the American Accounting Association, the American Institute of CPAs, the Financial Executives International, the Association of Accountants and Financial Professionals in Business and the Institute of Internal Auditors. This paper has the objective of identify recommendations about how it would be useful for an organization to adopt COSO as the structure for its own corporate compliance plan. According to Steinberg (2011) “In recent years, to complement the use of key performance indicators, which focus primarily on past performance, more organizations have adopted forward-looking key risk indicators to further enhance risk management effectiveness” (p. 01). Corporations monitor their performance based on indicators (KPIs) that provide a trend from a time in the past to date. This performance trend can be compared to others, such as competitors and general industry performance to assume how the business is moving ahead. But that is not enough.
References: COSO Committee of Sponsoring Organizations of the Treadway Commision (2013). About Us. Retrieved from http://www.coso.org/ Beasley, Mark S., Hancock, Bonnie V., and Branson, Bruce C. (2009). Strengthening Enterprise Risk Management for Strategic Advantage. Committee of Sponsoring Organizations of the Treadway Commision (COSO). Steinberg, Richard M. (2011). Using the New COSO Risk-Management Guidance. ERM & Internal Controls. Haymarket Media, Inc.