Implementing Corporate Governance
Implementing Corporate Governance
MBA560
Craighead
July 7th 2008
Introduction
As companies around the world try to manage the risks of its day to day activities, external processes and frameworks are designed specifically for companies to follow. So due to questionable corporate political campaign finance practices and foreign corrupt practices in the mid-1970s, the SEC and the U.S. Congress put in play campaign finance law reforms and the 1977 Foreign Corrupt Practices Act (FCPA) which criminalized transnational bribery and required companies to implement internal control programs.
In response, a private-sector initiative, called the National Commission on Fraudulent Financial Reporting (commonly known as the Treadway Commission) was formed in October 1985. The Treadway Commission issued its initial report in 1987, and among other items, recommended that the organizations sponsoring the Commission work together to develop integrated guidance on internal control. As a result of this initial report, the Committee of Sponsoring Organizations (COSO) was formed and it retained Coopers & Lybrand, a major CPA firm, to study the issues and author a report regarding an integrated framework of internal control.
The Coopers & Lybrand authored report, issued in 1992 and re-published with minor amendments in 1994, was titled "Internal Control - Integrated Framework." This report presented a common definition of internal control and provided a framework against which internal control systems can be assessed and improved. This report is the standard that U.S. companies use to evaluate their compliance with FCPA.COSO developed framework should reduce the incidents of fraud and establish common standards, internal controls and other criteria that companies can use to asses their control systems.
In this document we will discuss how the CME Group, the world's largest and most diverse futures and options exchange is...
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