Applying an Effective Control Environment to Integrated Reporting Through COSO_Final ima ir coso deck liv brad for 25 jun14

Applying an Effec.ve Control Environment to

Integrated Repor.ng Through

COSO

Liv Watson, Director of New Markets, WebFilings

Brad Monterio, Managing Director, Colcomgroup

Brad Monterio Managing Director

‘ ‘

Brad Monterio Managing Director, Colcomgroup, Inc. and Board Member, Ins.tute of Management Accountants [email protected]

Liv Watson Director, Interna.onal Business Development, WebFilings and Founder of XBRL [email protected]

SETTING CONTEXT §  Overview of Integrated

Repor.ng <IR> Framework §  Overview of Integrated

COSO Frameworks A NEW PARADIGM §  The Intersec.on of <IR>

and COSO ROLE OF TECHNOLOGY §  Intersec.on of <IR> , COSO

and Technology Q& A

AGENDA

©2014 Liv Watson and Brad Monterio

SETTING CONTEXT AN OVERVIEW OF THE NEW INTEGRATED REPORTING FRAMEWORK AND THE UPDATED COSO FRAMEWORK

www.TheIIRC.org

FINANCIAL REPORTING

CSR REPORTING

SUSTAINABILITY REPORTING

<IR> is a process founded on integrated thinking

that results in a periodic integrated report by an organiza.on about value crea.on

over .me and related communica.ons regarding aspects of value crea.on.

An integrated report is a concise

communica.on about how an organiza.on’s strategy, governance, performance and prospects, in the context of its external

environment, lead to the crea.on of value in the short, medium and long term.

INTEGRATED THINKING DRIVES <IR>

§ Improve quality of informa.on § Promote more cohesive/efficient approach to corporate repor.ng

§ Communicate full range of factors that materially affect ability to create value

§ Enhance accountability and stewardship

§ Promote interdependencies § Support integrated thinking, decision-‐making to create value over the short, medium and long term

GOALS OF <IR>

VALUE CREATION: A CENTRAL THEME

§ Be#er repor.ng, not more §  Emphasizes importance of integrated thinking

§ Consistent with corporate repor.ng developments

§ Basis for greater innova.on § Combines emphasis on: •  Conciseness and materiality •  Strategic focus and future orienta.on

•  Connec.vity •  Capitals and their interdependencies

<IR> IN A NUTSHELL

FINANCIAL INFORMATION NON FINANCIAL INFORMATION

§  Long history in corporate repor.ng §  Established, uniform repor.ng standards

§  Established oversight bodies §  Established quality control §  Established internal controls §  Well understood systems and processes – highly automated

§  Heavily structured §  Solid, broad market acceptance and credibility -‐ trusted

§  Short history in corporate repor.ng §  Lack of uniform repor.ng standards §  Lack of clear oversight responsibility – patchwork of compe.ng frameworks

§  Lack of strong quality control §  Internal controls not well understood §  Mix of systems an processes to gather/store informa.on – not highly automated; many manual processes

§  Ocen unstructured §  Narrow market acceptance – not well trusted

LOWER RISK HIGHER RISK

HISTORY OF FRAMEWORKS

1992 COSO 2004 ERM

2006 Small COSO

2013 COSO

COSO Overview

Source: www.coso.org/governance.htm

COSO: 5 COMPONENTS, 17 PRINCIPLES


§  XXXXX §  XXXXX

§  XXXXX §  XXXXX

2013 UPDATE TEMPLATES


A NEW PARADIGM THE INTERSECTION OF <IR> AND COSO – MANAGING AND BALANCING THE RISKS

COSO in the view of <IR> .

<IR> brings together material informaDon about an organizaOon’s strategy, governance, performance and prospects in a way that reflects

the commercial, social and environmental context within which it

operates (a “concise… periodic communicaOon”).

COSO brings together internal controls and enterprise risk management frameworks for

material informaDon.

We NEED YOUR FEEDBACK

Org Overview

Governance

Business Model

Risks & Opportuni.es

Strategy & Resources

Performance

Outlook

Basis of Prepara.on

Strategic Focus & Future

OrientaOon

Connec.vity

Stakeholders

Materiality

Conciseness

Reliability & Completeness

Consistency & Comparability

Control Environment

Risk Assessment

Control Ac.vi.es

Informa.on & Communic.

Monitoring Ac.vi.es


<IR> THROUGH THE LENS OF COSO

Org Overview

Governance

Business Model

Risks & Opportuni.es


Performance

Outlook

Basis of Prepara.on


OrientaOon

Connec.vity

Stakeholders

Materiality

Conciseness



Control Environment

Risk Assessment

Control Ac.vi.es

Informa.on & Communic.

Monitoring Ac.vi.es



Org Overview

Governance

Business Modell

Risks & OpportuniOes


Performance

Outlook

Basis of PreparaOon


OrientaOon

ConnecOvity

Stakeholders

Materiality

Conciseness



Control Environment

Risk Assessment

Control AcOviOes

InformaOon & Communic.

Monitoring AcOviOes



Org Overview

Governance

Business Modell



Performance

Outlook

Basis of PreparaOon


OrientaOon

ConnecOvity

Stakeholders

Materiality

Conciseness



Control Environment

Risk Assessment

Control Ac.vi.es

Informa.on & Communica.on

Monitoring Ac.vi.es



Org Overview

Governance

Business Modell



Performance

Outlook

Basis of PreparaOon


OrientaOon

ConnecOvity

Stakeholders

Materiality

Conciseness



Control Environment

Risk Assessment

Control Ac.vi.es


Monitoring Ac.vi.es



Org Overview

Governance

Business Modell



Performance

Outlook

Basis of PreparaOon


Orienta.on

ConnecOvity

Stakeholders

Materiality

Conciseness



Control Environment

Risk Assessment

Control Ac.vi.es


Monitoring Ac.vi.es



FINANCIAL STANDARDS:

US GAAP, IFRS

NON FINANCIAL FRAMEWORKS: SASB, CDP, GRI


Strategic Risks

OperaOonal Risks

Compliance Risks

ReporOng Risks ERM

ROLE OF TECHNOLOGY

ROLE OF EMERGING TECHNOLOGIES



CLOUD





ADVANCED ANALYTICS


EXPERT SYSTEMS


Applying an Effective Control Environment to Integrated Reporting Through COSO_Final ima ir coso deck liv brad for 25 jun14

Presentations & Public Speaking