How's this for irony? Compliance Week reports that the Securities and Exchange Commission's own internal controls are deficient. According to a report filed with Congress earlier this month by the Government Accountability Office, the SEC ended its year with "ineffective internal control over financial reporting."
Writer Tammy Whitehouse explains that the deficiencies the GAO found last year continued into this year, in areas such as financial reporting processes, information security and risk assessment, among others.
And they aren't likely to be brought up to snuff with a snap of the fingers, either. According to the report:
These deficiencies are likely to continue to exist until the SEC's general ledger system is either significantly enhanced or replaced, key accounting activity is fully integrated with the general ledger at the transaction level, information security controls are strengthened, and appropriate resources are dedicated to maintaining effective internal controls.
SEC Chair Mary Schapiro's response to the report, of course, is that correcting the deficiencies will be the of "highest priority." Somehow, I'm not sure I believe that fixing these problems is on the same level of importance for Schapiro and her crew as rooting out and punishing fraud, but maybe they will prove me wrong.
In fact, I hope they do prove me wrong. Because if they don't, what little bit of credibility the agency has left will be out the window. After all, what child really pays attention to the parent who says "Do as I say, not as I do"?