By Rob Starr, Big4.com Content Manager
Because risk management has grown more complex over the last decade, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) is looking for public comment on the latest update to Enterprise Risk Management – Integrated Framework.
Enterprise Risk Management — Aligning Risk with Strategy and Performance, will look at organizational requirements to improve both new and existing risks. COSO, which oversees issues pertaining to fraud deterrence, internal control and enterprise risk management is looking to expand on the original ERM Framework released in 2004. PwC were the authors of the original 2004 Framework, and they have been directed to lead the update to the Framework
under direction of the COSO Board.
Dennis Chesley is PwC’s Global Risk Consulting leader and lead partner for the update.
“It was 2014 when we got together with the COSO board and had a discussion about the fact that it was ten years on and if it was time to update the ERM framework,” he said. “After a bit of research, we came back to the table, had another discussion and decided to move forward.”
There were a few things driving that decision with the fulcrum being the fact risk management had evolved into a boardroom dialogue according to Chesley.
“Ten to twelve years ago, that discussion was one of risk disclosures tied to financial statements and not about the discipline of risk management and the effectiveness of it in an organization.”
In addition, risk programs have started to mirror their compliance counterparts in that they are setting standards for yearly risk self-assessments that need to have corresponding action and mitigation plans attached as benchmarks.
“The feeling was risk was getting further away from wondering what they truly needed to be worried about in any organization, how to look around corners to anticipate the biggest risks and how to vet that down to the operating level.”
The regulatory agenda’s push in some countries to have enterprise risk management put in place completed what Chesley refers to as “ a solid call to action,” for this update.
COSO has expanded its website, www.COSO.org, with a section on the Framework update that includes the proposed Framework, survey and comment tools, and FAQs about the project, details of the most significant updates and how to respond to the survey. Public comment will be accepted June 15 through Sept. 30, 2016. Written comments on the exposure draft will become part of the public record and will be available on the COSO website through Dec. 31, 2016.