COSO Releases Discussion Document with Guidance on Monitoring Internal Control

Public comment period to end October 31

ALTAMONTE SPRINGS, Fla. - The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is pleased to announce the release of its discussion document: Guidance on Monitoring Internal Control Systems. Developed by COSO and led by a diverse Grant Thornton LLP team, the guidance is designed to help organizations
monitor the quality of their internal control systems.

Accompanying the release of the discussion document is access to a Web-based feedback portal on the COSO Web site at http://www.coso.org/publications.htm. The comment period will end October 31, 2007.

"This guidance more fully develops the monitoring component of COSO’s Internal Control - Integrated Framework,” says COSO Chairman Larry Rittenberg, Ph.D. “The guidance is appropriate for organizations of any size or structure to improve the quality of their internal controls systems for multiple business purposes, but especially those
dealing with the reporting requirements under the U.S. Sarbanes-Oxley Act of 2002, Section 404.”

The guidance applies to the internal control objectives over financial reporting, as well as
the objectives related to effective operations and compliance. In addition, it includes the
principles of effective internal control over financial reporting developed by COSO in
2006, and reiterates the importance of those principles to all organizations — regardless
of size. Rittenberg stresses the breadth of the project’s scope, which comprises the
fundamentals of monitoring, and an in-depth examination of various types of information
Date: September 17, 2007

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normally available in an organization that could be used to monitor the effectiveness of
internal controls.

In addition to the project team — including Grant Thornton LLP partners, and led by Grant Thornton Managing Partner of National Corporate Governance Trent Gazzaway — the project utilized an oversight task force consisting of representatives from COSO's five sponsoring organizations and other experts; participation by the U.S. Government
Accountability Office; and representatives from audit firms and both large and small
companies. Also, there were project observers from both the SEC and the PCAOB.
“We were diligent in being inclusive of a variety of entities from the very beginning of
this important project,” says Rittenberg, “and were pleased to have input and feedback
from task force members who deal with controls and operations every day.”

Through the feedback portal, COSO is asking specific questions about the clarity and
applicability of the guidance. Input from respondents will be used in developing an
exposure draft, to be released later this year, including tools, case studies, and
implementation guidance. The final full publication currently is scheduled for release
during the first quarter of 2008.
Rittenberg points out that the goal is to deliver a finished product with broad applicability
and demonstrable effectiveness. “We think we’re making significant progress, and
additional practitioner input beyond that of our team will really help to ensure our final
product meets the needs of multiple stakeholders.

The guidance is conceptually solid and,
along with the practical examples, should be very useful to all organizations,” he says.
Originally formed in 1985 to sponsor the National Commission on Fraudulent Financial
Reporting, COSO is a voluntary private sector organization dedicated to improving the
quality of financial reporting through business ethics, effective internal controls, and
corporate governance. COSO comprises the American Accounting Association (AAA),
the American Institute of Certified Public Accountants (AICPA), Financial Executives
International (FEI), the Institute of Management Accountants (IMA), and The Institute of
Internal Auditors (IIA).
www.COSO.org
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