An Introduction to COSO Tools for Evaluating Internal Control

Abstract

Internal control is a very important management function to manage and mitigate risks in organizations. No doubt establishments have some form of controls-both formal and informal-but a comprehensive control method is generally not put into place as a matter of corporate philosophy. Professional bodies like AICPA, AM, IIA, IMA and FEI have worked to develop a tool called the COSO (Committee of Sponsoring Organization of Treadway Commission) Tool with the object of establishing a formal internal audit and control process in industries to manage and mitigate risks. The whole gamut of control aspects applicable to commercial organizations have been identified and classified as six interrelated components of business environment. This article is written with the object of identifying and explaining the merits and usefulness of the tool which is developed in the international arena.