Committee of Sponsoring Organizations of the Treadway (COSO) is a voluntary Commission formed by representatives of five private sector organizations in the US, to provide intellectual leadership in the face of three interrelated issues: business risk management (ERM), internal control, and deterrence of fraud. The organizations are:
Founded in 1985 in the US, COSO studies the factors that give rise to fraudulent financial information and creates texts and recommendations for all types of organizations and regulatory entities such as the FFMS (Federal Agency for Supervision of Financial Markets) and others.
The reports developed by COSO are documents that contain the main directives for the implementation of management and control systems. Since 1992, the COSO report has become the reference standard.
There are currently 2 versions of this report. The 1992 version and the 2004 version, which incorporates the requirements of the Sarbanes Oxley law into its model.
The COSO report is designed primarily to identify the events that may potentially affect the entity and to manage the risks, provide reasonable security for the administration and for the board of directors of the organization aimed at achieving the business objectives.
At the end of September 2004, the COSO II model was created, in response to scandals and irregularities that caused significant losses for investors, employees and other groups of interest within the companies.
Committee of Sponsoring Organizations of the Treadway Commission, publishes the Enterprise Risk Management (ERM) - Integrated Framework and its associated technical applications.
Expanding the concept of internal control, providing a more robust and extensive focus on the identification, evaluation and comprehensive risk management, according to the conclusions of the services of Pricewaterhouse to the commission.