Upcoming Changes to the SOC 2 Reporting Framework
Is your organization prepared for the upcoming changes to the SOC 2 reporting framework? All SOC 2 reports issued with a reporting period ending after December 15, 2018, must comply with the new Trust Services Criteria (also known as TSP 100) issued by the Assurance Services Executive Committee of the American Institute of Certified Public Accountants. SOC 2 reports evaluate the effectiveness of controls over the security, availability, processing integrity, confidentiality, and privacy of information processed by systems at an entity, division, or operating unit level. Revisions to the trust services criteria include an alignment of criterion with the Committee. Read More.
COSO Releases Enterprise Risk Management Supplement
A supplement to Enterprise Risk Management – Integrating with Strategy and Performance was recently published by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Issued as Enterprise Risk Management: Integrating with Strategy and Performance – Compendium of Examples, the new guidance features detailed examples for applying principles from the revised Enterprise Risk Management Framework. It also includes illustrations and case studies developed from industry practices recognized through comprehensive research (e.g., interviews, case studies). The examples offer context to the industry wherein the illustrated business operates, highlights applicable principles, shows how Enterprise Risk Management (“ERM”) is integrated with the business. Read More.
Guidance Proposed on Environmental, Social and Governance Risks
The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and the World Business Council for Sustainable Development are proposing new guidance to help companies respond to environmental, social and governance-related risks. In the draft guidance, Applying Enterprise Risk Management to Environmental, Social and Governance-Related Risks, the organizations discuss the changing global risk landscape, principles of the COSO Enterprise Risk Management Framework, and ways companies can address environmental, social and governance-related risk challenges. The draft guidance also offers examples of risk events and potential costs of failing to manage them. A press release on the draft guidance is available on the COSO website.
Paul Sobel Named COSO Chairman
The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) has appointed Paul Sobel as the organization’s new chairman. Knowledgeable on matters such as governance, enterprise risk management, and internal control, Sobel was selected due to his distinguished background in corporate spaces and professional services. He will serve a three-year term effective February 2018. Currently the vice president and chief audit executive at Georgia-Pacific, Sobel manages the company’s internal audit function and provides oversight and guidance regarding risk management and compliance programs. Sobel was on the Advisory Council for the recently updated COSO Enterprise Risk Management Framework. His background also. Read More.
Enterprise Risk Management Framework Update Issued
The Committee of Sponsoring Organizations of the Treadway Commission has issued an update to its enterprise risk management (“ERM”) Framework, Enterprise Risk Management–Integrating with Strategy and Performance (“ERM Framework”). Building on the previous version, the update is designed to help companies with managing their risks and create and preserve value. Structured in five components with different viewpoints and operating structures the updated ERM Framework features opinions on the present concepts and applications of enterprise risk management. In addition, the update covers challenges of enterprise risk management that business leaders and boards currently face, such as economic market changes, and evolving. Read More.
Financial Restatements Lowest in 15 Years
Audit Analytics is reporting the lowest total number of financial restatements among publicly traded companies since 2002. In its May report, Audit Analytics said restatements dropped 6.83 percent last year (671 companies). Separately, the percentage of financial restatements in 2016 was the lowest since 2007. Regulatory oversight is receiving partial credit for the low numbers. Audit Analytics Director of Research Don Whalen was not surprised by the downward trend, saying that improved internal controls over financial reporting have helped companies. Whalen noted the improved internal controls are due largely to the Public Company Accounting Oversight Board’s efforts and the Committee. Read More.