the treadway commission ’ s internal control - integrated framework. 3 don ’ t be put off by the titles of these frameworks. these frameworks are flexible enough to work effectively at a $ 25 million bank or a multi - billion dollar financial institution. the coso framework describes how each internal control element can be tailored to smaller and less complex organizations. for example, if coso is used as a best practice, you should modify the five following elements of internal control to meet your organization ’ s needs. control environment - board members and senior managers should identify the bank ’ s key business strategies, objectives, and goals and tailor coso to influence the bank ’ s management philosophy, culture, and ethics to establish and maintain an appropriate control environment. risk assessment - managers should look at the risks inherent in the businesses and processes they manage, and determine the bank ’ s risk appetite and establish risk measurement practices that are appropriate for their organization. control activities - managers should establish and maintain controls and monitoring processes that ensure they will be effective in achieving the organization ’ s profit and other objectives based on a designated level of risk. managers should monitor the organization ’ s business plan to assess how risk exposures are changing and determine whether new controls, or changes in existing controls, are needed to manage that level of risk. committee of sponsoring organizations of the treadway commission, internal control - intergrated framework. information and communication - information required to successfully achieve the organization ’ s control objectives should typically be accumulated in a management information system and should be communicated through reliable channels to all responsible parties - from tellers to board members. normal bank communication channels should normally be adequate for this purpose. however, new channels may be necessary if the type of information is too sensitive to communicate over existing channels, or if that information may be risky to the individual making the communication ( in other words, the knowledge of an incident of identified fraud for a whistle blower ). monitoring - monitoring should typically be the role of internal audit. a number of community banks do not have a permanent internal audit department. recognizing this, each community bank must develop a review ( audit ) function that is appropriate to its size and the nature and scope of its activities. as you may know, coso is just about to release a revised framework that will incorporate enterprise risk management ( erm ). when this is issued, the best practices in these five elements will need to be re - evaluated to address erm. best practice 2 : adopt a

i needed to have again assurance of your confidence after such a long and fierce pre - election competition. dear ladies and gentlemen mps, only two months ago in this hall i reiterated, and i would like now to reconfirm, the three key principles i have abided by since 2003, for which i will try hard to be remembered as characterizing my work at the central bank – independence, predictability and transparency. throughout my whole first term of office i followed these principles, and today i would like again to state that my second term of office will be governed by the same principles. i have permitted no political interference in the activities of the bank, which is a fundamental principle underlying the law on the bnb and the treaty on the accession of bulgaria to the eu. i will not allow any political meddling in the work of the bnb in my next term of office. i highly appreciate the first words of the newly elected speaker of the 41st national assembly at our first meeting : „ mr. iskrov, we are well aware of the law on the bnb, of bnb ’ s key role for the financial stability in the country, and in spite of our disagreement with the early timing of your reelection, no one questions the independence of the central bank. this is a question of principle, on which there is no argument ”. these were ms. tsacheva ’ s first words, and i am really grateful to her for them. independence should certainly not be an excuse for idleness or work not done. i would emphasise once again, just as i have so far worked with two bulgarian governments and all legitimate political parties and their representatives regardless of the political spectrum they belong to, so they too can count on bnb ’ s expert advice and support in the future. every one of you is welcome to the central bank to discuss any issues as long as this is in the interest of the stability of our country, and the banking system in particular. dear ladies and gentlemen, finally and in the context of everything said by me and by the speakers before me during this debate, i believe that now the most important thing as regards the country ’ macroeconomic and financial policy is preserving stability and ensuring predictability ; predictability, because the global financial and economic crisis has shown that countries, which follow stability - oriented and consistent macroeconomic policies are going less painfully through this difficult for all countries period. the bnb ’ s role is to secure the country ’ s price and