COSO To Publish Guidelines On Blockchain Technology
A prominent organization that directs industry on risk management practices plans to publish guidance next year for companies looking to implement internal controls to the blockchain.
COSO or The Committee of Sponsoring Organizations of the Treadway Commission, is forming voluntary guidelines for organizations to increase their oversight of blockchain-technology projects. The guidance is supposed to be released in the first quarter of 2020.
According to Paul Sobel, COSO’s chairman, the guidance is intended at executives in financial services as well as businesses utilizing blockchain technology in their supply chains.
“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 system.”
COSO develops structures that companies apply to establish internal controls and control enterprise risks. The organization is known among risk executives for a deliberate risk-management framework is formed after accounting scams in the early 2000s and updated in 2017.
One of COSO’s preferences for the year ahead is to develop guidance that discusses arising problems witnessed by risk professionals, according to Mr. Sobel.
COSO also intends to issue guidance on implementing risk-management principles to compliance departments and forming a risk-appetite statement. The group this month also issued guidance for companies on managing the risk of a cyber breach.
COSO’s guidance is designed to be practiced by boards to spark discussions about what types of governance and controls make sense for their organization.
“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,” Mr. Sobel.
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