COSO Internal Control Framework

The Committee of Sponsoring Organizations of the Treadway Commission created a framework to evaluate internal controls.

This framework, often referred to as COSO, lists five components of any internal control system:

• Control Environment - The ethical values, integrity, and tone at the top of the organization.
• Risk Assessment - The process of identifying and analyzing risks that could prevent the organization from achieving its objectives.
• Control Activities - The actions, policies, and procedures that help ensure management directives are carried out.
• Information and Communications - The process of identifying, capturing, and communicating relevant information to the right people, at the right time, to support the functioning of internal control.
• Monitoring - The process of evaluating the effectiveness of internal control performance over time.

👉 Answer:

👨‍🎓 Here are the steps to figure it out:

• This activity contains both, the data being reported and the movement of that information throughout communication channels.