SEC Audit Failure Will Raise the Bar for Government Agencies

Research Publication Date: 1 June 2005 ID Number: G00128198 SEC Audit Failure Will Raise the Bar for Government Agencies French Caldwell The U.S. Securities and Exchange Commission (SEC) has failed an internal audit of its financial controls. This will increase congressional scrutiny of other government agencies. © 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. NEWS ANALYSIS Event On 26 May 2005, the U.S. General Accounting Office (GAO) announced the results of an audit showing that the SEC "did not maintain effective internal control over financial reporting." The GAO audit, which is available online at www.gao.gov/new.items/d05244.pdf, found "material weaknesses" in the SEC's internal controls, including general IT controls. The GAO announcement closely follows the release of an SEC staff report on the implications of the Sarbanes-Oxley Act (www ...