RISK MANAGEMENT AND THE INTERNAL CONTROL SYSTEMS PROMOTED BY COSO IN THE CONTEXT OF FINANCIAL CRISIS

The objective of this paper is to present the role and importance of internal control systems in good risk management practice, with a particular emphasis on the internal audit and compliance functions within such a framework. The COSO framework defines internal control as a process, effected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, compliance with applicable laws and regulations. As of September 2007, COSO submits another project "Internal control - integrated framework" to the public debate in order to have an integrated guidelines regarding internal control implementation and monitoring per different types of companies. The new project includes three parts: Part I Summary (executive summary); part two Guidelines and monitoring of internal control systems and part three Practical examples. These guidelines are indented to be a valuable asset for management of stock exchange-listed companies, which are compelled to apply Sarbanes- Oxley law. The Sarbanes-Oxley law, officially named,Public Company Accounting Reform and Investor Protection Act" was adopted in 2002 in the United States in order to review the accounting practices and to rebuild community's confidence in the Public Companies Financial Reports.