Executive's Guide to COSO Internal Controls: Understanding and Implementing the New Framework

CHAPTER 10

COSO Reporting Processes

THIS CHAPTER LOOKS AT ANOTHER view and a different side of the revised COSO internal control cubical framework, one of the three categories on reporting objectives that is often shown on the top side of the COSO framework model diagrams. Exhibit 9.1 shows the flipped-over COSO framework from this different perspective, and this chapter reviews the reporting objectives of COSO internal controls.

As we discussed in Chapter 9 and earlier chapters, the real strength of the COSO internal control framework is that it describes internal control objectives in a three-dimensional sense, where each control objective and principle must relate to, and interact with, other related internal controls. The reporting control objective is important because virtually all elements of an enterprise must provide input to or develop their own internal and external reporting processes. These reports may range from internal performance reports to fulfilling external regulatory reporting requirements.

This chapter reviews the reporting requirements component of the COSO internal control revised framework and discusses why accurate and timely reporting processes are important to an enterprise in order to achieve an effective internal control environment. The chapter also discusses why accurate and timely reporting is important for all elements of internal controls, from control environment factors to monitoring activities, and why this reporting should serve as a communications ...