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COSO to Issue Guidance on Blockchain

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Distributed ledger technology will be a focus for the Committee of Sponsoring Organizations of the Treadway Commission in the year ahead

COSO-Blockchain

COSO Blockchain

COSO Blockchain-An influential organization that advises industry on risk management practices plans to issue guidance next year for companies looking to apply internal controls to blockchain technology.

The Committee of Sponsoring Organizations of the Treadway Commission, or COSO, is developing voluntary guidance for companies to strengthen their oversight of blockchain-technology projects. The guidance is expected to be released in the first quarter of 2020.

The guidance is aimed at executives in financial services as well as companies using blockchain technology in their supply chains, according to Paul Sobel, COSO’s chairman.

“I want to make sure that we’ve got that properly controlled because it is a very different view of the world when you have distributed ledgers,” Mr. Sobel said. “It isn’t something that is contained in your own system.”

COSO develops frameworks that companies use to establish internal controls and manage enterprisewide risks. The organization is best known among risk executives for a voluntary risk-management framework it developed after accounting scandals in the early 2000s and updated in 2017.

One of COSO’s priorities for the year ahead is to develop guidance that addresses emerging issues faced by risk professionals, according to Mr. Sobel.

COSO also plans to issue guidance on applying risk-management principles to compliance departments and developing a risk-appetite statement. The group this month also published guidance for companies on managing the risk of a cyber breach

COSO’s guidance is designed to be used by boards as a way to spark discussions about what kinds of governance and controls make sense for their companies.

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Article Credit: WSJ

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