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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (59342)	4/24/2006 3:18:19 PM
From: shades	Respond to of 110194

SEC's Internal Control Flaws Remain, GAO Report Says By Judith Burns Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--Internal control weaknesses at the Securities and Exchange Commission have yet to be fixed, although the SEC has made some progress toward resolving them, the Government Accountability Office reported Monday. The government watchdog agency found three material weaknesses in the SEC's internal controls while auditing the SEC's 2004 financial statement. The GAO said its audit of the SEC's 2005 results showed those flaws remained in place and uncovered other, less important flaws. In an update issued Monday, the GAO offered suggestions for the SEC to improve its accounting and financial reporting, including hiring more financial management experts. Congress adopted legislation in 2002 requiring public companies to assess their internal controls over financial reports each year, subject to further review by the company's outside auditor. Government accounting is tightening up as well; the SEC underwent its first GAO audit in 2004, which identified problems with computer security, tracking of fines and penalties, and preparation of financial results. According to the GAO's latest report, the SEC has been hampered by a staffing shortage in its financial management office and reliance on "manually intensive, time-consuming" procedures to produce financial statements. The GAO said that for some SEC line items, detailed information supporting the balances and underlying transactions weren't readily available and were hard to retrieve. It recommended the agency beef up its financial management office and procedures, and continue efforts to resolve previously identified weaknesses in internal controls. Other, less serious problems found by the GAO include the way the SEC collects fees for registering securities and for filings for merger and tender offers. It said in some cases, the SEC overcharged for such filings while in other cases it undercharged filers. SEC Chairman Christopher Cox said his goal is to fully resolve material weaknesses involving financial statement preparation and penalty tracking in fiscal year 2006, which ends Sept. 30. The GAO said it will evaluate the SEC's progress in its 2006 audit. -By Judith Burns, Dow Jones Newswires; 202-862-6692; Judith.Burns@dowjones.com (END) Dow Jones Newswires April 24, 2006 15:09 ET (19:09 GMT) Copyright (c) 2006 Dow Jones & Company, Inc.- - 03 09 PM EDT 04-24-06