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When evaluating internal control over financial reporting, Exchange Act Rule 13a-15(c) requires the evaluation to be based on a framework that is “a suitable, recognized control framework that is established by a body or group that has followed due-process procedures.”  Public companies have historically used the 1992 COSO framework.  In May of 2013, COSO updated the framework and announced that COSO will consider the 1992 framework superseded on December 15, 2014.

In a meeting between SEC officials and the Center for Audit Quality (CAQ) SEC Regulations Committee, the SEC stated that the SEC staff plans to monitor the transition for issuers using the 1992 framework to evaluate whether any SEC action becomes necessary or appropriate at some point in the future.  The staff indicated that the longer issuers continue to use the 1992 framework, the more likely they are to receive questions from the staff about whether the issuer’s use of the 1992 framework satisfies the SEC’s requirement to use a suitable, recognized framework (particularly after December 15, 2014 when COSO will consider the 1992 framework to have been superseded by the 2013 framework).

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