COSO – Templates

Internal Control Over External Financial Reporting:

A Compendium of Approaches & Examples

Agenda

• • • • • Snap Shot – New Framework How to use Vol. #4 (ICEFR Template)?

Major Regulatory Changes Impacting ICEFR Vol. #4 Templates by Component Where to get source documents

COSO – Health Check Recorded COSO New Framework Overview at: http://web.ganconference.com/?page=REGISTER& meeting=6345633

[email protected]

Action item before implementation

Join 2013 COSO Implementation Group for FREE templates, advise and learn from others implementing this new framework.

COSO Implementation http://www.linkedin.com/groups/COSO Implementation-4888186/about

Compliance Made Simple ©

Vol. #4 – How To Use It?

• Intended Audience =

Everyone!

and Gov’t Entities) (Public, Private, Not-For-Profit • How to read “Approaches” and “Examples” (

pg.2

) • Approaches = summary-level of activities for management • Examples = more specific illustrations to users on application of each principle and may provide 1 or more points of focus (e.g. attributes of a principle) •

Appendix A

- Index of All Examples by Topic (here are a few) 1.

2.

Expectations for Governance Oversight Globalization (FCPA issues

page 147

!) • Limitations of Illustrations • Vol #4

does not provide 100%

of all examples you need for your assessment of effective ICEFR (

pg. 2

)

Considerations of External F/S Reporting (Defining “types”)

Financial Statements

Annual & Interim FS

Other

Earnings Release Selected Fin. Info. – Co. Website Selected $ in Reg. Filings

Materiality Considerations

1. SEC guidance: Top 1 M of Staff Bulletin 2. IASB (International Accounting Standards Board): provides a definition in Paragraph QC11 conceptual framework for financial reporting 2010 Conclusion: Vol #4 notes US and International Standards for definition of materiality (for Mgmt). Both standards are

almost identical

.

FS - Assertions

• • • • • Same as in prior COSO guidance materials: Existence or Occurrence Completeness Rights & Obligations Valuation or Allocation Presentation & Disclosures

Note:

AICPA, PCAOB & International Auditing & Assurance Standards Board agree on the above assertions.

• •

Use of Templates & Documentation

Smaller entities: examples translate well to applications for smaller entities!

Documentation – 2 Levels: 1.

2.

Management’s Documentation efforts must be at a level to state it has “sufficient evidence”.

External Auditor Attests on ICFR: Documentation should be at the level an auditor can leverage management’s understanding of Controls.

NOTE:

COSO calls out

HIGH USE of JUDGEMENT

Mgmt. should document how such decisions were considered and the final decisions reached.

Ground Rules – Vol #4

Most Effective way to read this volume: 1.

2.

One Chapters for One COSO Component 1 st Page of the chapter will always have a) Summary, b) List of Principles and c) relevant approaches for applying principles

Component

Control Environment Risk Assessment Control Activities Information Communication Monitoring Activities

Start page

13 49 79 111 139

# of Pages

36 * 30 * 32 28 17 * Most significant changes in vol. #4

Control Environment - Template Principles – 1 to 5 and 20 Attributes Where to find it?

Audit Evidence

Control Environment - Key Changes

Risk Assessment - Template

• Principles 6 to 9 = 27 attributes 4 th quarter Materiality check too!!!

Control Activities - Template

• Principles 10 to 12 = 16 attributes 4 th quarter/YE Validation IT Control test!!!

Information & Communication Template • Principles 13 to 15 = 14 attributes

Information & Communication

Monitoring – Key Changes

Principles 16 to 17 = 10 attributes

2014 Implementation Lead Time Company Overview/Forecast (2 mos. lead time) SOX Aggregate Impact (3 mos. lead time) Finance & IT Deliverables Impact assessment (3-4 mos. lead time) Control Compliance Analysis (“CCA”)

Compliance Made Simple ©

Where to get other SOURCE Documents?

AICPA (2008) Audit Committee Toolkit (Approx. 7 templates will change) Monitoring Guidance (2008) (over 400 pages in 3 vol. set) New 2013 COSO (over 500 pages then 150+ for ICFR guidance) Compliance Made Simple © 2013 Illustrative Tools (145 pages)

Action Items before implementation!

ACTION ITEM:

Connect with Aviva Spectrum via Slideshare (Hyperlink to this and other ppt files)

Contact Information

Sonia Luna, President, CEO [email protected]

700 S. Flower Street #1100 Los Angeles, CA 90017 P: (213) 250-5700

Compliance Made Simple ©