Sponsoring organizations:

COSO

Comprising the professional associations listed above, the Committee of Sponsoring Organizations (COSO) is a voluntary private-sector organization. COSO is dedicated to guiding executive management and governance entities toward the establishment of more effective, efficient, and ethical business operations on a global basis. It sponsors and disseminates frameworks and guidance based on in-depth research, analysis, and best practices.

Guidance on Fraudulent Financial Reporting

Fraudulent Financial Reporting: 1997-2007 —

An Analysis of U.S. Public Companies (delivery to be determined)

COSO currently is engaged in a research project that analyzes occurrences of fraudulent financial reporting among U.S. public companies for the 10-year period, 1997-2007, to update the 1999 monograph. The researchers are examining SEC enforcement actions alleging violations of the antifraud provisions of the 1933 and 1934 Securities Acts. In addition to examining the 1997-2007, the project will expand previous research by developing a matched-pairs test of companies with and without noted occurrences of fraudulent financial reporting to better identify key factors associated with fraud.

Fraudulent Financial Reporting: 1987-1997 —

An Analysis of U.S. Public Companies (1999)

Ten years after its 1987 release of the Report of the National Commission on Fraudulent Financial Reporting, COSO engaged in a research project to analyze occurrences of fraudulent financial reporting from 1987, through 1997. In 1999, COSO issued a monograph -- Fraudulent Financial Reporting: 1987-1997, An Analysis of U.S. Public Companies -- that provided extensive descriptive information on the nature of those fraudulent acts, the individuals and entities involved, and numerous corporate governance-related factors. This monograph has subsequently influenced actions by regulators and standard-setters.

EXECUTIVE SUMMARY > >
Full Document (PDF, 190KB) : : Need Adobe Acrobat? Click here!

Report of the National Commission on

Fraudulent Financial Reporting

This report contains the summary of the analysis of fraudulent financial reporting conducted in the mid-1980s by the National Commission on Fraudulent Financial Reporting (known as the Treadway Commission) and its related recommendations of solutions to reduce the occurrence of such fraud. The report emphasized that the prevention and earlier detection of fraudulent financial reporting must start with the entity that prepares financial reports. The Commission's recommendations for increased deterrence also involved new SEC sanctions, greater criminal prosecution, improved regulation of the public accounting profession, adequate SEC resources, improved federal regulation of financial institutions, and improved oversight by state boards of accountancy. Recommendations also were made to standard-setters, including the AICPA’s Auditing Standards Board, to improve the effectiveness of the audit of financial statements. To encourage educational initiatives, the Commission also recommended changes in the business and accounting curricula as well as in professional certification examinations and continuing professional education. The report contained more than 150 recommendations.

Summary of Recommendations
Full Document - (PDF, 1.4MB / 198 pages) Need Adobe Acrobat? Click here!

Coso