Sarbanes-Oxley (SOX) is fast approaching for small to mid-sized enterprises (SMEs) that are publicly-traded in US stock exchanges (i.e. those companies whose market capitalization is less than $75 million). Many SMEs aren't ready, however, as few have a framework in place for assessing internal controls. COSO has developed guidance for performing this all-important task, but it is not necessarily suited for SMEs.
Cuckoo for COSO?
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a voluntary private-sector organization. Its purpose is to improve the quality of financial reporting through sound business ethics, effective internal controls, and corporate governance. COSO was originally formed in 1985 to study the causal factors that can lead to fraudulent financial reporting and developed recommendations for public companies, third-party auditors, and the Securities and Exchange Commission (SEC).