The Scopes Of Coso : The National Commission On Fraudulent Financial Reporting

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Abstract During the1980s, there were some significant scandals related to Saving Loans and Association (S&Ls) and a few significant audit failures occurred. In preventing those fiascoes from happening again, the National Commission on Fraudulent Financial Reporting (NCFFR) had established in 1985, which the commission was James C. Treadway Jr. The NCFFR intended to study the elements that can lead to financial frauds and to develop recommendations on internal control for public companies, the US Securities and Exchange Commission (SEC), other regulator and educational institutions. COSO was established in the same year and it became the Committee of Sponsoring Organizations of the Treadway Commission. COSO is a private sector that was…show more content…
He was sentenced to 150 years in federal prison. Madoff 's auditor also faces criminal charges, allegedly failing to conduct due diligence (reuters.com 2009). COSO is the Committee of Sponsoring Organizations of the Treadway Commission and it was established in 1985. COSO is a private sector that was sponsored by American Accounting Association (AAA), American Institute of Certified Public Accountants (AICPA), Financial Executives International (FEI), Institute of Internal Auditors (IIA), and Institute Management Accountants (IMA). The scopes of COSO are dedicated for improving organizational performance and governance by effective internal control, enterprise risk management, and fraud deterrence. In 1992, COSO released the initial framework on Internal Control and the framework was built on five components in the following: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities. SARBANES-OXLEY ACT (SOX) One of the major conclusions of the commission was the best way to prevent major financial frauds was to improve internal control and COSO developed a model of internal controls (Framework), published in 1992 what is now referred to as the COSO Model of Internal Control. The AICPA realized the values of the model and adopted the COSO Framework as Statement on Auditing Standard (SAS) No. 78, “Consideration of Internal Control in Financial Statement

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