Assessment on differences between COSO Model and COCO Model

Submitted to: Fahmida Akhter

Course Code: ACT 403
Course Title: Auditing and Assurance

Submitted by

Fouzia Chowdhury 183002302

Internal control is a process in auditing and accounting that is designed to assist an organization in
achieving specific goals or objectives. COSO and COCO share more than pleasant alliteration.
Organizations can create robust internal control objectives that protect data by understanding the
similarities, differences, and overlaps between the two.

What is COSO?

Internal control is defined COSO framework as a process involving an entity's board of directors,
management, and other personnel that is designed to provide "reasonable assurance" about the
achievement of goals. The Treadway Commission's Committee of Sponsoring Organizations (COSO)
developed a COSO Framework for evaluating internal controls in 1992. The Tread way Commission
(COSO) is a widely used framework in the United States and around the world COSO was founded by
five major professional associations to sponsor the National Commission on Fraudulent Financial
Reporting.

What Is COCO?

The Canadian Institute of Chartered Accountants first published the CoCo (criteria of control) framework
in 1995. This model, which is based on COSO, is thought to be more concrete and user-friendly by some.
CoCo describes internal control as actions that foster the best result for an organization. Their reliability
of internal and external financial reporting, and adherence to rules and laws. These actions contribute to
the achievement of the organization’s objectives.

Differences between COSO Model and COCO Model

While the two seem similar, they perform different functions for organizations. There are some different
differences between the COSO and COCO model but one of the most important is that COSO gives
all the responsibilities about the internal control to the director of the organizations and COCO says
that every employee of the organization is responsible of the internal control. Internal control systems
Globalization and technological advancements have led to the development of new models, which
have emerged as a proposal to implement new ways to improve and refine organizational control.
COCO focuses on the achievement of objectives and defines internal control as the elements of an
organization that taken together support the achievement of these objectives. COCO focuses on the
reliability of internal and external reporting. On the other hand COSO defines internal control as the
process affected by an entity's Board of Directors, management and personal designed to provide
reasonable assurance regarding the achievement of objective. COSO focuses on the reliability of
financial reporting. Organizations using financial risk reporting models that align with COSO can
still use COCO to help organize their enterprise IT landscape. The two work together, like the variety
of documents needed for a new house.
COSO’s goal is to provide thought leadership dealing with three interrelated subjects:

 Effectiveness and efficiency of operations;

 Reliability of financial reporting;
 Compliance with applicable laws and regulations.

On the other hand an IN COCO action, which contributes to the achievement of the organizations
objective, center around:

 Effectiveness and efficiency of operations;

 Reliability of internal and external reporting;
 Compliance with applicable laws and regulations and internal policies

Also we see that the internal control in a company is very important because with this one you can make
your company succeed or fail, also teaching not only your top executives but also the rest of the
employees the correct way to do their job and the expectations you have for them, this can make want to
succeed if they have clear goals. We believe that every company should implement this both like COSO
or COCO or make a new one depending on the country we are talking about , to have a better control in
it.