Internal controls are an integral part of enterprise-wide risk management. Under COSO’s Internal Control Framework, directors have responsibility for overseeing internal control processes so that they can reasonably expect that their directives will be followed. Directors should also keep up with innovations in corporate governance, and this is one key area in which the legal advisers of financial companies can assist their clients.
Indeed, legal counsel can help lead the way to developing sound practices in corporate governance. While we are discussing the importance of effective internal controls, let me point out that the Public Company Accounting Oversight Board (PCAOB) has recently approved Auditing Standard No.