The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is developing voluntary guidance to help companies generate an oversight of their blockchain-related projects. The guidance will likely be published in the first quarter of 2020.

Need for Internal Controls to Blockchain

Chairman of COSO Paul Sobel spoke about the need for controls to blockchain-related projects, saying, “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. It isn’t something that is contained in your own system.”

Sobel added that the guidance is aimed at executives in financial services as well as companies using blockchain technology in their supply chain. The guidance is designed to be used by the companies’ decision-makers to help them discuss what kinds of governance and controls are suitable for their blockchain-related projects.

“The hope is that it creates a dialogue within the executive ranks, as well as within the board, so that they have a better understanding of, really, what their oversight responsibilities are,” the chairman said.

COSO’s Future Frameworks

COSO is a joint initiative of five private organizations dedicated to providing thought leadership through the development of frameworks and guidance on enterprise risk management, internal controls, and fraud deterrence.

One of the commission’s key projects for 2020 is to develop a framework that addresses emerging issues faced by risk professionals, according to Mr. Sobel. 

Other frameworks and guidance include a framework for the application of risk-management principles to the compliance department and guidance for companies on managing the risk of a cyber breach.

Source: www.wsj.com

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