By James Hamilton, J.D., LL.M.
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) intends to issue guidance designed to help companies monitor the quality of their internal control systems as part of complying with the internal control mandates of the Sarbanes-Oxley Act. COSO believes that companies have not explored the basic linkage of effective monitoring to the evidence needed by management to support its assertion regarding the effectiveness of internal controls over financial reporting as required by Section 404(a). COSO pledged that the guidance will be consistent with the SEC guidance expected to be issued in late 2006 or early 2007 and the PCAOB guidance expected by Spring of 2007.
COSO’s timetable for the guidance is to issue a white paper by March 15, 2007 and approve the full document for a two-month comment period by July 30, 2007. The final guidance is to be issued by December 22, 2007