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FGMSD-80-81 1 (1980-09-02)

handle is hein.gao/gaobabayz0001 and id is 1 raw text is: 113 M UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 OIVISION OF FINANCIAL AND G ENERAL MANAGEMENT STUDIE5 SEPTEMBER 2, 1980 B-199434 The Honorable Harold M. Williams Chairman, Securities and Exchange ,, Commission 113194 Dear Mr. Williams: Subject: Opportunities for Improving the Quality and Efficiency of the Securities and Exchange Commission's Process for Reviewing ReportsI(FGMSD-80-81) This report discusses the results of our review of the Commission's administrative procedures used in reviewing com- pany reports to determine whether they are complying with the Securities Act of 1933 and the Securities Exchange Act of 1934. These acts require companies to send periodic finan- cial disclosure reports to the Commission. For those companies not complying with these reporting requirements, the Cimision must determine appropriate enforcement actions and/or sanctions which will ensure that adequate disclosures are made. We believe that you can increase the efficiency and improve the quality of your process for reviewing reports and following up on delinquent reports. Your staff has also recog- nized the potential for improvement and has already taken significant action on the areas discussed in this report. If fully carried out, these positive steps s1lould improve Commis- sion disclosure reviews. We are well aware that the number of statements and reports filed with the Commission has increased dramatically over the last 10 years. And while filings have increased from about 27,000 to 77,000 between 1968 and 1979, the number of people reviewing the reports has been reduced. Conse- quently, the Commission has decreased the number of thorough reviews and resorted to abbreviated reviews despite evidence that greater--rather than less--scrutiny of the reports is called for. Particularly subject to the shorter review arc the annual 10K and quarterly 10Q reports, which are the key source for data with which to assess a firm's financial con- dition. We focused our attention on the Commission's review of these reports, because of their importance and the work- load they represent. 6 Q( (9C9010)

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