Cosoerm

1) What are the five elements of the CoSo framework? What are the main differences between the CoSo and CoSoERM frameworks (if any)?

The five elements are control environment, risk assessment, control activities, information and communication, and monitoring.

Control environment is the organizationÐ'ÐŽÐ'Їs first line of defense to reduce the risks of financial reporting errors and it consists of the following principles: Integrity and ethical values, importance of board of director, managementÐ'ÐŽÐ'Їs philosophy and operating style, organizational structure, commitment to financial reporting competencies, authority and responsibility and human resources.

Risk assessment is to identify and assess the internal and external risks to the organization and is a prerequisite in order to manage risk effectively. The three main principles are the importance of financial reporting objectives, identification and analysis of financial reporting risks and assessment of fraud risk.

Control activities are policies and procedures that help to ensure that management directives are carried out and help to mitigate risks. The principles are elements of a control activity, control activities linked to risk assessment, selection and development of control activities and information technology.

Information and communication helps to play a key role in generating reports that contains operational, financial and compliance-related information. It helps to ensure information flow across and around the organization and the principles are information needs, information control, management communication, upstream communication, board communication and communication with outside parties.

Monitoring is to keep an eye on the internal control systems and to detect any deficiencies and to report them to the upper management