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GAO-08-461R 1 (2008-04-01)

handle is hein.gao/gaocrptawkp0001 and id is 1 raw text is: SGAO Accountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 April 1, 2008 The Honorable Christopher Cox Chairman U.S. Securities and Exchange Commission Subj ect: Internal Control: Improvements Needed in SEC's Accounting and Financial Reporting Process Dear Mr. Cox: On November 16, 2007, we issued our report' on the U.S. Securities and Exchange Commission's (SEC) fiscal years 2007 and 2006 financial statements and on SEC's internal control as of September 30, 2007. We also reported on the results of our tests of SEC's compliance with selected provisions of laws and regulations during fiscal year 2007. The purpose of this report is to present areas of SEC's internal controls identified during our fiscal year 2007 audit that could be improved.2 This report contains 14 recommendations to SEC to improve these internal controls and procedures. These recommendations are in addition to those we already provided to SEC as a result of our prior audits of SEC's financial statements.' Results in Brief 4. Our November 16, 2007, report concluded that SEC had a material weakness in internal control over its financial reporting process, and therefore did not maintain effective internal 1 GAO, FinancialAudit: Securities and Exchange Commission's Financial Statements for Fiscal Years 2007 and 2006, GAO-08-i67 (Washington, D.C.: Nov. 16, 2007). 2 The internal control issues concerning information security are discussed in a separate report: GAO, Information Security: Securities and Exchange Commission Needs to Continue to Improve Its Program, GAO- 08-280 (Washington, D.C.: Feb. 29, 2008). ' We made recommendations in our internal control reports issued as part of our fiscal years 2004, 2005, and 2006 SEC financial statement audits: GAO, Material Internal Control Issues Reported in SEC's Fiscal Year 2004 Financial StatementAudit Report, GAO-05-69 I R (Washington, D.C.: July 27, 2005); Management Report: Opportunities for Improvements in SEC's Internal Controls andAccounting Procedures, GA(-0 5- 693R (Washington, D.C.: Aug. 12, 2005); Internal Control: Improvements Needed in SEC's Accounting and FinancialReporting Procedures, GAO-06-459R (Washington, D.C.: Apr. 21, 2006); and GAO, Internal Control: Improvements Needed in SEC's Accounting and Operational Procedures, GAO-07482R (Washington, D.C.: Apr. 3, 2007). ' A material weakness is a significant deficiency or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. GAO-08-461R SEC Management Letter Page I

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