COSOframework

The COSO framework refers to a set of interrelated frameworks for internal control, enterprise risk management, and governance developed by the Committee of Sponsoring Organizations of the Treadway Commission. It provides a systematic approach to designing, implementing, and assessing controls and risk management to help organizations achieve objectives and comply with laws.

Its most widely used component is the Internal Control – Integrated Framework, first published in 1992 and revised in 2013. It identifies five interrelated components: control environment, risk assessment, control activities, information and communication, and monitoring. The framework is applied to enhance reliable financial reporting, effective operations, and compliance.

COSO also publishes the Enterprise Risk Management – Integrated Framework, released in 2004 and updated in 2017. It presents eight components—internal environment, objective setting, event identification, risk assessment, risk response, control activities, information and communication, and monitoring—emphasizing alignment of risk management with strategy and value creation.

COSO was formed in 1985 by five private-sector organizations: the American Institute of CPAs, the American Accounting Association, Financial Executives International, the Institute of Internal Auditors, and the Institute of Management Accountants. The framework has been adopted by numerous organizations worldwide and is especially influential in evaluating internal controls over financial reporting under the Sarbanes‑Oxley Act in the United States.

Organizations implement COSO by mapping controls to the framework’s components or principles, conducting gap analyses, and monitoring ongoing effectiveness. While comprehensive, COSO does not guarantee fraud prevention or error-free operations; its effectiveness depends on strong governance, culture, and sustained management commitment.

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