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GAO To SEC: You've Still Got Work To Do!
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Posted by: Jack Ciesielski 4/27/2006 5:23 AM
There will be many, many smirking controllers who download this report of the GAO.

It was sent from the GAO to Chairman Cox, and it's a followup of the GAO's examination of the SEC last year. In that examination, the GAO noted that the Commission had some inferior internal controls of its own (while overseeing the implementation of Section 404 reviews at many thousands of public firms).

According to the GAO, there's still room for improvement. Their latest recommendations include:

"1. Staff the Office of Financial Management with the collective knowledge, skills, and experience necessary to achieve effective implementation of internal control over the financial statement preparation and reporting process.

2. Finalize formal, written policies and procedures governing financial reporting processes and related internal control and quality assurance, including the basic documentation, audit trails, and crosswalks needed to support financial statement amounts, to facilitate management review of financial information.

3. Formalize and place into operation a senior management council or committee to oversee financial reporting activities; provide advice; and regularly review the agency's financial information, operations, and policies.

4. Determine cutoff dates for significant account balances that are both appropriate and practical to facilitate interim financial reporting and meeting year-end financial reporting deadlines.

5. Prepare interim footnote disclosures to facilitate meeting year-end financial reporting deadlines."

Nothing subtle about the irony here; these very same recommendations probably appeared in a few thousand or so letters delivered to managements by their auditors in 2005.
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