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The Committee of Sponsoring Organizations of the Treadway Commission (COSO), an organization focused on combating corporate fraud, will be issuing guidance for supply chain management and financial services companies looking to implement blockchain technology, The Wall Street Journal reported.
COSO is a joint initiative of the five private sector organizations – the American Accounting Association (AAA), the American Institute of Certified Public Accountants (AICPA), the Financial Executives International (FEI), The Institute of Management Accountants (IMA), and The Institute of Internal Auditors (IIA).
As per the report, the guidance, expected to be released in the first quarter of 2020, is part of COSO’s efforts to strengthen its oversight of projects that leverage blockchain technology.
“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,” Paul Sobel, COSO’s chairman, said. “It isn’t something that is contained in your own system.”
Earlier this month, COSO, in collaboration with Deloitte Risk & Financial Advisory, released new guidance on “Managing Cyber Risk in a Digital Age.” It said:
“As companies continue to take advantage of new technologies (e.g. artificial intelligence, blockchain, cloud computing, machine learning, etc.) and continue to use external parties to conduct operations, cyber attackers will take advantage of new vulnerabilities that allow information systems and controls to be exploited.”
The report also notes the use of cryptocurrencies by illicit actors, such as, in the case of ransomware attacks.
“A business-as-usual approach to cyber risk management is bound to result in catastrophic damage. Those charged with governance, from the board to the C-suite, must drive a strong tone at the top, communicate a sense of severity and urgency, and challenge the status quo of their ERM programs and cyber security awareness throughout every level of the organization. There is little to no room for error,” Sobel said.
