COSO Gives Approval for Study on Sustainability
A Brief Summary
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) approved a study to provide guidance and insights to its Internal Control-Integrated Framework (ICIF) in the field of environmental, social and governance. Through ICIF, the organisations can ensure better internal control.
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The study will be made public by the end of 2022, which will bring insights from interviews, third-party research, and a paper authored by Herz, Monterio and Thomson.
Paul Sobel, COSO Chair, stated "All organizations managing their sustainability efforts and producing public ESG reports need effective internal control to build trust and confidence in this type of data used by multiple stakeholders. Regardless of the specific ESG framework or standard, the globally accepted COSO ICIF, with its five components and 17 principles, can help these organizations create, develop, enhance, and assess the internal control effectiveness of sustainable business/ESG information, which often tends to be more qualitative, longer-term and judgment-based than financial reporting."
It should be noted that the ICIF-2013 update to the landmark 1992 edition was enhanced by expanding the financial reporting category of objectives to include other forms of reporting, such as "non-financial and internal reporting."
Some principal authors entailed in the study are Robert Herz, a former Fasb chair and founding member of the IASB. Robert Hirth, senior managing director at Protiviti and COSO Chair Emeritus. Jeffrey C Thomson, President and CEO of IMA. The managing technical editors are Douglas Hileman and Shari H Littan.