Page 24 - The Insurance Times September 2022

COSO'S

ENTERPRISE

RISK

MANAGEMENT

FRAMEWORK

COSO 2013 to the COSO cube, which focused on the design and
implementation of a risk management framework. The COSO
The Committee of Sponsoring Organisations of the Treadway
cube became a widely-accepted framework for organisations
Commission (COSO) was established in the mid-1980s, initially
to use and it became established as a model that could be
to sponsor research into the causes of fraudulent financial
used in different environments worldwide.
reporting. Its current mission is to: 'help organizations improve
performance by developing thought leadership that enhances
internal control, risk management, governance and fraud
deterrence.'

Although COSO's guidance is non-mandatory, it has been
influential because it provides frameworks against which risk
management and internal control systems can be assessed
and improved. Corporate scandals, arising in companies
where risk management and internal control were deficient,
and attempts to regulate corporate behaviour as a result of
these scandals have resulted in an environment where
guidance on best practice in risk management and internal
control has been particularly welcome.

The ERM model

COSO originally created an enterprise risk management (ERM)
model in 1992 which was shaped like a pyramid and focused
on the evaluation of existing controls. This was updated in The ERM model

24 The Insurance Times, September 2022