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COSO – TemplatesInternal Control Over External Financial Reporting:A Compendium of Approaches & Examples
Agenda• Snap Shot – New Framework• How to use Vol. #4 (ICEFR Template)?• Major Regulatory Changes Impacting ICEFR Vol. #4• Templates by Component• Where to get source documents
New Framework Principles
COSO – Health Check
Recorded COSO New Framework Overview at:http://web.ganconference.com/?page=REGISTER&meeting=6345633
Join 2013 COSO Implementation Group for FREE templates, advise and learn from others implementing this new framework.
Action item before implementation
Compliance Made Simple ©
COSO Implementation
http://www.linkedin.com/groups/COSO-Implementation-4888186/about
Vol. #4 – How To Use It?• Intended Audience = Everyone! (Public, Private, Not-For-Profit
and Gov’t Entities)• How to read “Approaches” and “Examples” (pg.2)• Approaches = summary-level of activities for management• Examples = more specific illustrations to users on application of
each principle and may provide 1 or more points of focus (e.g. attributes of a principle)
• Appendix A - Index of All Examples by Topic (here are a few)1. Expectations for Governance Oversight2. Globalization (FCPA issues page 147!)
• Limitations of Illustrations• Vol #4 does not provide 100% of all examples you need for your
assessment of effective ICEFR (pg. 2)
Considerations of External F/S Reporting (Defining “types”)
Financial Statements Other
Annual & Interim FS Earnings Release
Selected Fin. Info. – Co. Website
Selected $ in Reg. Filings
Materiality Considerations
1. SEC guidance: Top 1 M of Staff Bulletin2. IASB (International Accounting Standards Board): provides a
definition in Paragraph QC11 conceptual framework for financial reporting 2010
Conclusion: Vol #4 notes US and International Standards for definition of materiality (for Mgmt). Both standards are almost identical.
FS - Assertions
Same as in prior COSO guidance materials:• Existence or Occurrence• Completeness• Rights & Obligations• Valuation or Allocation• Presentation & Disclosures
Note: AICPA, PCAOB & International Auditing & Assurance Standards Board agree on the above assertions.
Use of Templates & Documentation• Smaller entities: examples translate well to applications for
smaller entities!• Documentation – 2 Levels:
1. Management’s Documentation efforts must be at a level to state it has “sufficient evidence”.
2. External Auditor Attests on ICFR: Documentation should be at the level an auditor can leverage management’s understanding of Controls.
NOTE: COSO calls out HIGH USE of JUDGEMENT Mgmt. should document how such decisions were considered and the final decisions reached.
Ground Rules – Vol #4Most Effective way to read this volume:1. One Chapters for One COSO Component2. 1st Page of the chapter will always have a) Summary, b) List
of Principles and c) relevant approaches for applying principlesComponent Start page # of Pages
Control Environment
13 36 *
Risk Assessment 49 30 *
Control Activities 79 32
Information Communication
111 28
Monitoring Activities
139 17
* Most significant changes in vol. #4
Control Environment - Template
Where to find it?
Audit Evidence
Principles – 1 to 5 and 20 Attributes
Control Environment - KeyChanges
Risk Assessment - Template• Principles 6 to 9 = 27 attributes
4th quarter Materiality check
too!!!
Control Activities - Template• Principles 10 to 12 = 16 attributes
4th quarter/YE Validation IT Control test!!!
Information & Communication - Template• Principles 13 to 15 = 14 attributes
Information & Communication
Monitoring – Key Changes
Principles 16 to 17 = 10 attributes
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Company Overview/Forecast (2 mos. lead time)
SOX Aggregate Impact(3 mos. lead time)
Finance & IT Deliverables Impact assessment(3-4 mos. lead time)
2014 Implementation Lead Time
Control Compliance Analysis
(“CCA”)
Compliance Made Simple ©
MonitoringGuidance (2008)(over 400 pages
in 3 vol. set)
AICPA (2008)Audit Committee Toolkit
(Approx. 7 templates will change)
New 2013COSO (over 500 pages
then 150+ for ICFR guidance)
Where to get other SOURCE Documents?
2013 IllustrativeTools (145 pages)
Action Items before implementation!
ACTION ITEM: Connect with Aviva Spectrum via Slideshare (Hyperlink to this and other ppt files)
Sonia Luna, President, [email protected]
700 S. Flower Street #1100Los Angeles, CA 90017P: (213) 250-5700
Contact Information
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