b. United States
1) Internal control – Integrated Framework is widely accepted as the standard for the design and operation of internal control systems.
2) The Watergate investigations of 1973 – 74 revealed that U.S. companies were bribing government officials, politicians, and political parties in foreign countries. The result was the Foreign Corrupt Practices Act of 1977.
3) The private sector also responded by forming the National Commission on Fraudulent Financial Reporting (NCFFR) in 1977.
a) The NCFFR is known as the Treadway Communication because James C. Treadway was its first chair.
b) The Treadway Communication was originally sponsored and funded by five professional accounting organizations based in the United States.
c) This group of five become known as the Committee of Sponsoring Organizations of the Treadway Communication (COSO).
d) The Commission recommended that this group of the five organizations cooperate in creating guidance for internal control.
4) The result was internal control – Integrated Framework, published in 1992, which was modified in 1994 and again in 2013.