Applying an Effective Control Environment to Integrated Reporting Through COSO! By Liv Watson and Brad Monterio Wdesk and ColcomGroup

1. Applying
an
Effec.ve
Control
Environment
to
Integrated
Repor.ng
Through
COSO
Liv
Watson,
Director
of
New
Markets,
WebFilings
Brad
Monterio,
Managing
Director,
Colcomgroup

2. Brad Monterio
Managing Director
‘‘
Brad
Monterio
Managing
Director,
Colcomgroup,
Inc.
and
Board
Member,
Ins.tute
of
Management
Accountants
bmonterio@colcomgroup.com
Liv
Watson
Director,
Interna.onal
Business
Development,
WebFilings
and
Founder
of
XBRL
liv.watson@webfilings.com

3. 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

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

8. www.TheIIRC.org

9. FINANCIAL
REPORTING
CSR
REPORTING
SUSTAINABILITY
REPORTING

10. <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.

11. INTEGRATED
THINKING
DRIVES
<IR>

12. § 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>

13. VALUE
CREATION:
A
CENTRAL
THEME

14. § 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

15. 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

17. HISTORY
OF
FRAMEWORKS
1992
COSO
2004
ERM
2006
Small
COSO
2013
COSO

18. COSO
Overview
Source:
www.coso.org/governance.htm

19. COSO:
5
COMPONENTS,
17
PRINCIPLES
Source:
www.coso.org/governance.htm

20. § XXXXX
§ XXXXX
§ XXXXX
§ XXXXX
2013
UPDATE
TEMPLATES
Source:
www.coso.org/governance.htm

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

22. 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.

23. We
NEED
YOUR
FEEDBACK

24. 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
©2014
Liv
Watson
and
Brad
Monterio
<IR>
THROUGH
THE
LENS
OF
COSO

25. 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
©2014
Liv
Watson
and
Brad
Monterio
<IR>
THROUGH
THE
LENS
OF
COSO

26. Org
Overview
Governance
Business
Modell
Risks
&
OpportuniOes
Strategy
&
Resources
Performance
Outlook
Basis
of
PreparaOon
Strategic
Focus
&
Future
OrientaOon
ConnecOvity
Stakeholders
Materiality
Conciseness
Reliability
&
Completeness
Consistency
&
Comparability
Control
Environment
Risk
Assessment
Control
AcOviOes
InformaOon
&
Communic.
Monitoring
AcOviOes
©2014
Liv
Watson
and
Brad
Monterio
<IR>
THROUGH
THE
LENS
OF
COSO

27. Org
Overview
Governance
Business
Modell
Risks
&
OpportuniOes
Strategy
&
Resources
Performance
Outlook
Basis
of
PreparaOon
Strategic
Focus
&
Future
OrientaOon
ConnecOvity
Stakeholders
Materiality
Conciseness
Reliability
&
Completeness
Consistency
&
Comparability
Control
Environment
Risk
Assessment
Control
Ac.vi.es
Informa.on
&
Communica.on
Monitoring
Ac.vi.es
©2014
Liv
Watson
and
Brad
Monterio
<IR>
THROUGH
THE
LENS
OF
COSO

28. Org
Overview
Governance
Business
Modell
Risks
&
OpportuniOes
Strategy
&
Resources
Performance
Outlook
Basis
of
PreparaOon
Strategic
Focus
&
Future
OrientaOon
ConnecOvity
Stakeholders
Materiality
Conciseness
Reliability
&
Completeness
Consistency
&
Comparability
Control
Environment
Risk
Assessment
Control
Ac.vi.es
Informa.on
&
Communica.on
Monitoring
Ac.vi.es
©2014
Liv
Watson
and
Brad
Monterio
<IR>
THROUGH
THE
LENS
OF
COSO

29. Org
Overview
Governance
Business
Modell
Risks
&
OpportuniOes
Strategy
&
Resources
Performance
Outlook
Basis
of
PreparaOon
Strategic
Focus
&
Future
Orienta.on
ConnecOvity
Stakeholders
Materiality
Conciseness
Reliability
&
Completeness
Consistency
&
Comparability
Control
Environment
Risk
Assessment
Control
Ac.vi.es
Informa.on
&
Communica.on
Monitoring
Ac.vi.es
©2014
Liv
Watson
and
Brad
Monterio
<IR>
THROUGH
THE
LENS
OF
COSO

30. FINANCIAL
STANDARDS:
US
GAAP,
IFRS
NON
FINANCIAL
FRAMEWORKS:
SASB,
CDP,
GRI
©2014
Liv
Watson
and
Brad
Monterio

31. Strategic
Risks
OperaOonal
Risks
Compliance
Risks
ReporOng
Risks
ERM

32. ROLE
OF
TECHNOLOGY

33. ROLE
OF
EMERGING
TECHNOLOGIES

34. ROLE
OF
EMERGING
TECHNOLOGIES

35. ROLE
OF
EMERGING
TECHNOLOGIES
CLOUD

36. ROLE
OF
EMERGING
TECHNOLOGIES

37. ROLE
OF
EMERGING
TECHNOLOGIES

38. ROLE
OF
EMERGING
TECHNOLOGIES

39. ROLE
OF
EMERGING
TECHNOLOGIES
ADVANCED
ANALYTICS

40. ROLE
OF
EMERGING
TECHNOLOGIES
EXPERT
SYSTEMS

41. ROLE
OF
EMERGING
TECHNOLOGIES