The Committee of Sponsoring Organisations (Coso), a US not- for-profit organisation comprising the country's main accountancy institutes, has published a detailed guide to help companies improve the quality of their financial reporting and comply with legislation such as the US Sarbanes-Oxley Act.
Produced in conjunction with professional services firm PricewaterhouseCoopers, the guide defines the risks faced by businesses and how to deal with them.
It covers strategy, day-to-day running of operations, reliability of reporting and how to comply with laws and regulations. It also explains the roles employees can take to develop a common approach to managing risk and complying with legislation.
The Coso method for risk assessment is the approach most companies are using to comply with the Sarbanes-Oxley Act and has been recommended by US financial market regulator the SEC.
"Risk management in organisations is fragmented and lacks visibility and oversight," said Forrester analysts Michael Rasmussen and Adam Brown in a report on the Coso guide.
"This fragmented approach leads to duplication efforts and technologies trapped in the silos resulting in islands of information. The Coso ERM framework provides the structured guidance that organisations are currently looking for to accomplish this."