COSO Framework
Introduction
COSO or the Committee of Sponsoring Organizations is a combined initiative that entails five private segments firms and is devoted to providing understood leadership throughout the development of guidance and frameworks on fraud deterrence, internal control, and corporate risk management. COSO Framework states inner power as a procedure affected by a firm’s administration, the board of directors, and other individuals that provide reasonable assurance of the success of objectives in the firm’s operational efficiency and effectiveness. The goals of the COSO framework include authorization, accuracy, competence, security, segregation of duties, validity, physical safeguard, and error handling.
COSO Framework’s components
The first component is risk assessment, where all activities and related risks in a firm are assessed, and each is measured on a spectrum o being high or low risk. The Likelihood of a risk happening is also considered to govern which risk a firm should first attend. Risk assessment creates the objectives of the entire firm, identifies risks, handles errors, and ensures accuracy in the firm’s activities and thus impacting the goals of COSO.
The second component is on the control environment that embodies of internal control culture that the firm has. It determines whether a firm has a culture of compliance and discipline or entails of a culture that has lax procedures and policies. In most cases, this culture starts with the activities carried out by executive management. This component would help in the segregation of duties through assigning responsibility and authority. It also ensures competence and physical safeguard.
Control activities entail both internal control and procedures used in risk mitigation, especially in management activities that are risky in risk assessment. They are activities that the management, internal auditors, and employees test to make sure they are compliant. For example, in risk assessment, if the risk that is identified involves handling cash, a control measure or activity should engage two employees to manage the money. Through outsourcing, this component meets the objective of duties segregation and also improves security by following procedures and policies.
Monitoring activities are the fourth component that includes activities managers employ in internal control or to monitor processes within the firm. For example, if the manager in charge of purchasing gets reports on the overall purchases that exceeded $5,000 weekly, they would carry out a monitoring action. This component reports deficiency and performs ongoing monitoring and separate evaluations. Thus, the objectives of error handling, accuracy, risk identification, and validity are met.
Finally, in communication and information components involves the communication process by the management on the specific policies employees need to follow and the culture compliance. An example is through sending amended or new strategies to every employee in the firm to make them aware of the changes. The component measures the quality of info and the effectiveness of the communication process.
Concerns of an Auditor in an IT Audit.
The responsibilities of an IT auditor include assessing and analyzing the technological infrastructure in a firm to discover problems with compliance, efficiency, and risk management. An IT auditor is concerned about cybersecurity of a firm that entails on skills of crisis management that includes media, public, and customer relations. Another concern is change management. IT auditors are concerned about disruption, innovation, and transformation as their firms evolve to deal with new risks. Finding the right staff is another concern for IT auditors. They are concerned about resourcing, skills, and team in IT recruitment.
Integrating the COSO framework
The firm’s management should start by assessing the five components of COSO and the 17 principles counter to the current systems of a firm’s internal control and making the necessary adjustments. The laws of the framework must be used to avoid violation of SOX. Auditors will evaluate the internal control of a firm to ensure standards are met. Company X will use the 17 principles to be the checklist where it will determine their internal control systems and strengths but should first lay a background. The methods entail a plan and scope; documentation and assessment; remediate; test, design, and report and optimizing the effectiveness of internal controls.
References
Hertel, F. (2019). Effective Internal Control and Corporate Compliance.
King, A. M. (2016). A guide to COSO’s framework: a valuable, practical resource to help your transition to the updated COSO internal control framework. Strategic Finance, 97(10), 12-13.
Rae, K., Sands, J., & Subramaniam, N. (2017). Associations among the five components within the COSO internal control integrated framework as the underpinning of quality corporate governance. Australasian Accounting, Business and Finance Journal, 11(1), 28-54.
Berglund, N. R., Eshleman, J. D., & Guo, P. (2018). Auditor size and going concern reporting. Auditing: A Journal of Practice & Theory, 37(2), 1-25.
Postmodernism is a wide-ranging and general term applied to fiction, philosophy and literary criticism among others. It is a reaction to the assumed certainty of objective and scientific efforts to understand reality. Starting with “The Lesson” by Toni Cade Bambara, which focuses on how the narrator gets to understand the division and inequality between various economic and social classes that exist in society. In this case, the difference between black and white Americans. She made this discovery after she and her neighbour friends visited the F.A.Q Schwartz store that sells toys accompanied by Mrs Moore, an educated woman who was known for regularly involving herself with the children to teach them (Bambara, 1972). The children had never visited a similar place before; to them, it seemed like a place for whites only because of the price tags on the items in the store.
The trip became an eye-opener for the narrator when they started seeing the overwhelming prices of items in the store. For example, they were astonished to see that a paperweight cost $480, yet they did not even know what a paperweight the function of the item. Mrs Moore explained to them that it was to ensure that a desk remained organized and tidy. The children could not see the need to purchase the item for that much. Also, the narrator spotted a clown that cost $35, which was unrealistic. She even goes ahead to imagine the reaction of her mother if she requested the clown for her birthday. She would estimate the cost of the clown would be enough to buy beds for her brothers, pay rent, and the bill for piano and would cover transport for everyone to visit their grandfather in the countryside (Bambara, 1972). One child thought that white people were not in their right minds to spend so much money on such unnecessary things. This prices at the toy store Cleary shows the different standards of living between the poor and the rich and relates to the fragmentation element in the postmodern literature which is the combination of various aspects with the aim of coming up with a conclusion. Mrs Moore ensured that the children visited a different place than the usual, exposed them to a different world intending to change their mindset.
Postmodernism uses the concept of meaning and idea rejection immensely. Bambara applies this concept almost at the end of the story when the narrators causing sugar and Miss Moore have a conversation about the meaningless nature of democracy in the current society. The two were discussing how an unjust social and economic system creates unfair access to resources and money for African Americans.
Postmodernism fails to embrace the constraints, assumptions and prejudices of modernism. The balloon Cleary depicts postmodernism. The story is about what people go through every day. It is common to need an outlet to express your emotions, just like the narrator creates the balloon to reveal that he misses his partner after she was away from him for a while. However, it is not realistic to use an enormous balloon to express the feeling of missing an absent loved one, yet this is the primary focus of the story. The philosophy of postmodernism undermines the solemnity of art, which is what Barthelme’s story emphasizes on. People’s opinions, thoughts, feelings and perceptions keep changing depending on the situation surrounding them, which is a feature of postmodernism. On the same note, the narrator deflated the balloon when its purpose come to an end. The partner was back, and hence the lonely vacuum was full once again, therefore, eliminating the need for the balloon. However, this did not mean that it stopped to exist. Perhaps the next time a situation occurs that has a similar effect on the narrator, then he might look for helium and inflate the balloon one more time searching for the same fulfilment of overcoming lonely emotions
Postmodernism advocates for intellectual freedom and expression. The narrator expressed his feelings by inflating a massive balloon in the city with people who could have objected the act. The police tried to deflate the balloon to minimize the distraction it caused but were unable to locate the place that could destroy the balloon. Nobody understood how such a gigantic balloon exited. It is ironical how people adapted to seeing the balloon and never complained. Instead, children started even playing around it. How could a society full of people allow the emotions of one person distract the entire place? This reaction makes it difficult to understand postmodernism; the subject is confusing and complicated.