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Jun 28

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New Guidelines for Fraud Deterrence

The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) has released an updated Internal Control – Integrated Framework in the fight against fraud.  It provides expanded practical advice regarding effective implementation of internal controls.  COSO is a joint initiative of five private sector organizations with a shared interest in enterprise risk management, internal control and fraud deterrence.  The sponsoring entities are the American Accounting Association, the American Institute of CPAs, Financial Executives International, the Association of Accountants and Financial Professionals in Business, and the Institute of Internal Auditors.

The framework outlines five integrated components and 17 principals, summarized here, which must be both “present and functioning”.  It is not enough to establish a system of internal control and not ensure its actual practice.  These items are specifically designed to be applicable to all entities, both large and small.  Any major deficiency prevents the organization from claiming an effective system of internal control.  The board of directors, management, internal and external auditors, and other personnel have responsibilities related to internal control and a failure to treat such responsibilities with due care can cause serious harm to an organization’s function, stability, reputation and ability to continue as a going concern.

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2013/06/new-guidelines-for-fraud-deterrence/

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