Sarbanes-Oxley

COSO drafted their Discussion Document on Guidance on Monitoring Internal Control Systems This 52 pages document is available for your review and comments before 31-Oct-07. This guidance elaborates on the 1992 Internal Control —Integrated Framework by COSO.

Background: The Internal Control Framework consists of five interrelated and equally important components. Monitoring is one of the five IC components. Internal control systems (IC) exist to help organizations meet their goals and objectives. Organizations need a mechanism for assessing the quality of their internal control systems’ performance over time. That mechanism is monitoring. Monitoring is effective when it leads to the identification and correction of control weaknesses before they materially affect the achievement of the organization’s objectives.  Monitoring is a cost-effective approach to providing timely information about the continued effectiveness of an internal control system. As such, effective monitoring should be a net benefit to organizations and their stakeholders.

The scope of COSO “monitoring” maps to ISO 9001 Quality Management System Clauses

• 5.6 Management Review,
• 8.2 Monitoring and measurement, and
• 8.4 Analysis of data.

Now is a good time for the quality managers, engineers, and auditors to visit your finance / accounting organization to offer a jointly review of this document and to decide how your QMS can better support SOX Internal Controls.