How Secure Is EDGAR Exactly?
Submitted by Marla Singer
November 18th, 2009 5:39 am
The blog of the Legal Times reports that the United States Securities and Exchange Commission, winner of last year’s CEAR Award for Fiscal Responsibility and Accountability, “falls short” in its yearly audit.
Summarizing the report the Legal Times quipped:
For example, the GAO reported that SEC’s general ledger system allows unauthorized personnel to view manipulate or destroy data, and that “serious unauthorized activity” may remain undetected.
That, apparently, is just part of the problem. The GAO report notes specifically:
As discussed in more detail later in this report, the internal control deficiencies that we identified in fiscal year 2009 collectively represent a material weakness in SEC’s internal control over financial reporting and give rise to significant management challenges that have (1) increased the risk that data processed by SEC’s information systems are not reliable or appropriately protected, (2) impaired management’s ability to prepare its financial statements without extensive manual procedures, and (3) resulted in unsupported entries and errors in the general ledger. This material weakness is primarily caused by SEC’s continued reliance on processes and systems that were not designed to provide the accurate, complete, and timely transaction-level financial information that management needs to make well-informed decisions, or to accumulate and report reliable financial information without extensive manual workarounds and compensating controls.
Oh, that’s reassuring. Not a new problem either, it seems:
Since our 2004 audit of SEC’s financial statements, we have consistently reported significant deficiencies in SEC’s information security controls.
Well, we’re sure the problem is isolated to internal accounting systems. It’s not like this should have any impact on investor confidence or anything.
We continued to identify ineffective information system controls for the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) and Fee Momentum systems. (Emphasis ours).
Oh boy. Are we actually still funding this agency? The full GAO report is attached for your enjoyment.
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