The committee for Sponsoring Organizations of the Treadway Commission (COSO) is a joint initiative that was established in 1985 in the United States to deter corporate fraud, encompassing five supporting organizations: Financial Executive International (FEI), American Institute of Certified Public Accounts (AICPA), the Institute of Internal Auditors (IIA), Institute of Management Account (IMA), and the American Accounting Association (AAA) (COSO, n.d). Fundamentally, the key purpose for COSO is to offer conception leadership via the creation of detailed structures and guiding principles on fraud deterrence, enterprise risk management (ERM), and internal control. The Treadway Commission was purposely established to inspect, scrutinize, and recommend on corporate financial reporting amidst spectacular failures in corporate practices in mid 1980s ( Leech, 2011) . Since its establishment, the commission has studied and produced numerous reports on divergent issues in regard to its core objectives. Also, the commission has developed and issued multiple frameworks, including ERM-Integrated framework in 2004, which highlighted the significance of considering risk in both the strategy setting procedure and driving performance, Internal Control-Integrated Framework in 1992 that explicated control as a means to an end, Guidance on Monitoring Internal Control Systems in 2009, Internal Control Issues in Derivatives Usage in 1996, and Internal Control over Financial Reporting in 2006 among other frameworks ( Leech, 2011) .
To deter financial reporting malpractices, the commission issued a proposal in 1987 that sought to compel all public entities’ managements to be formally accountable for and report on the effectiveness of internal control. This recommendation was validated through the enactment of Sarbanes-Oxley Act in 2002 ( Leech, 2011) . Further, the Internal Control-Integrated Framework incorporated five overlapping elements: control activities, control environment, risk evaluation, information and communication, and monitoring. Ideally, control environment is acknowledged as the foundation of an entity and as it influences the control awareness of an organization’s workforce ( Leech, 2011) . It incorporates numerous factors such as ethical values, process for developing and managing workers in the company, delegation of authority systems, and integrity. Further, risk assessment entails identification and scrutiny of risks to develop means of managing them, while control activities entails the procedures and policies that aid in ensuring managerial orders are executed appropriately. In addition, control activities help ascertain that appropriate measures are adopted to mitigate the risks that inhibit the achievements of an organization’s goals ( Leech, 2011) . Equally important, information and communication systems play a pivotal role in production of organizational reports that involve financial and compliance-based information, and operational information that facilitate running and control of an organization. On the other hand, monitoring entails a procedure that scrutinizes the quality, suitability, and the accomplishment of internal control systems in the course of time.
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Additionally, in 2001, COSO collaborated with PricewaterhouseCoopers do create a framework to be utilized by business managements in evaluation and enhancement of their enterprise risk management ( Leech, 2011) . As a result of high-profile corporate failures and scandal involving various companies such as WorldCom, Enron, Adelphia, and Tyco International resulted in calls to advance corporate risk management and governance, which were incorporated in the Sarbanes-Oxley act ( COSO, 2009) . By and large, this law amplifies the deep-rooted stipulations for public entities to perpetuate systems of internal control, where corporate managements and independent auditors are required to certify and attest to the effectiveness of those systems. The Commission developed Enterprise Risk Management - Integrated Framework to offer more extensive and robust focus on the wide concern of ERM and expand on internal control ( COSO, 2009) . This ERM framework encompassed eight component, including the five overlapping components of the internal control framework, event identification, objective setting, and risk response. Besides, in 2009, the commission provided a comprehensive guidance to guide public entities on auditing their internal control systems. This guidance clarified the monitoring components of internal control, which included the establishment of a foundation for monitoring the systems, designing and implementation of monitoring procedures that utilize persuasive information to address meaningful risks that may inhibit organizational objectives, and evaluating and disclosing results ( COSO, 2009) . The commission has been steadfast in ensuring that organizations uphold ethical measures in risk management, internal control, governance, and financial reporting.
References
COSO. (2009). Strengthening enterprise risk management for strategic advantage . Retrieved from www.coso.org/documents/COSO_09_board_position_final102309PRINTandWEBFINAL_000.pdf .
COSO. (n.d). History . Retrieved from www.coso.org/Pages/aboutus.aspx .
Leech, T. (2011). COSO: Is it fit for purpose. Governance, Risk, and Compliance Handbook , 65-75.
