Internal Control over External Financial Reporting (ICEFR): A Compendium of Approaches

Abstract

According to COSO, the intent of the Compendium is to help users apply the New Framework to internal control over external financial reporting (ICEFR). Therefore, the Compendium is a companion publication to the New Framework that provides approaches and examples to illustrate how entities may apply the principles set out in the New Framework to a system of ICEFR. It provides practical approaches and examples that illustrate how the components and principles set forth in the New Framework can be applied in designing, implement-ing and conducting internal controls over the preparation of external financial statements. The approaches and examples relate to each of the five components and 17 principles set forth in the New Framework and illustrate how various characteristics of principles may be present and functioning within a system of ICEFR objectives; however, they do not attempt to illustrate all aspects of the components and relevant principles necessary for effective ICEFR. The approaches describe how organizations may apply the related principles within their system of ICEFR to give users a summary-level description of activities that management may consider as they apply the New Framework in an ICEFR context. The examples provide specific illustrations to users on the application of each principle, based on situations drawn from practical experiences and illustrating one or more points of focus germane to the principle.