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COSO proposes revisions to its ERM framework

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Jun 15, 2016

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has issued a proposal, “Enterprise Risk Management — Aligning Risk With Strategy and Performance,” which addresses the increasing complexity of risk and new risks that have developed since the issuance of its 2004 enterprise risk management (ERM) framework.

The related FAQ document notes that the 2004 ERM framework:

  • Represents the adoption of a structure of components and principles.
  • Simplifies the definition of ERM.
  • Emphasizes the relationship between risk and value.
  • Focuses on the integration of ERM.
  • Examines the role of culture.
  • Elevates the discussion of strategy.
  • Improves the alignment between performance and ERM.
  • More clearly links ERM and decision making.
  • Differentiates between ERM and internal controls.
  • Refines risk appetite and acceptable variation in performance.

Comments on the proposal are due by September 30, 2016. For more information, see the press release and proposal on COSO’s Web site.

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