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COSO 2013 For Austin AGA January 2014. Changes are less than earthshaking More than 71 percent of internal audit executives at public companies said they.

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Presentation on theme: "COSO 2013 For Austin AGA January 2014. Changes are less than earthshaking More than 71 percent of internal audit executives at public companies said they."— Presentation transcript:

1 COSO 2013 For Austin AGA January 2014

2 Changes are less than earthshaking More than 71 percent of internal audit executives at public companies said they they expect adoption of the new framework to be not significant or somewhat significant; only 22 percent said they expect implementation to be moderately or extremely significant. IIA survey quoted in Compliance Week article: SEC Drops New Hint: Update to New COSO Framework by Tammy Whitehouse 11/13

3 20 YEARS

4 1992  2013 Increased stakeholder expectations for transparency regarding controls – Sarbanes Oxley – A-123 – ?

5 1992  2013 Emphasis on governance

6 1992  2013 Reliance on technology

7 1992  2013 Complex business models – Global – Outsourcing

8 1992  2013 Awareness of fraud

9 9

10 New structure Same 5 components Add 17 principles And 82 points of focus

11 COSO Model 11 Leita Hart-Fanta, CPA, CGFM, CGAP

12 Under RISK ASSESSMENT COMPONENT Principle 8 – The organization considers the potential for fraud in assessing risks to the achievement of objectives. Points of Focus: – Considers various types of fraud – Assesses incentives and pressures – Assesses opportunities – Assesses attitudes and rationalizations

13 Quote from the 2013 COSO Executive Summary When a major deficiency exists with respect to the presence and functioning of a component or relevant principle, or with respect to the components operating together in an integrated manner, the organization cannot conclude that it has met the requirements for an effective system of internal control.

14 Leita’s version of COSO Risk Assessment Control Activities Information and Communication Control environment MONITORINGMONITORING 14 Leita Hart-Fanta, CPA, CGFM, CGAP

15 Which element of the COSO model? 1.Establish goals and objectives annually 2.Report frequently to oversight agencies 3.Send financial data to department heads each week 4.Administrative staff in Engineering inspects budget amendments created by accounting each month 5.Link risks to the goals and objectives of the department 6.Establish an ethics policy 7.Force users to create new passwords for the customer application each month 8.Delegate authority and responsibility in job descriptions 9.Reconcile reports to federal grantor to the general ledger 10.The same person that opens the mail does not record the receipt and make the deposit 11.Put performance measures for each department on the internet 15 Leita Hart-Fanta, CPA, CGFM, CGAP

16 COSO ERM Model 16 Leita Hart-Fanta, CPA, CGFM, CGAP

17

18 Governance Enterprise risk management Internal controls COSO

19 Integrated auditing Compliance Financial Operational Fraud IT


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