GAO has said it found deficiencies in about half of the internal supervisory controls it tested at the Securities and Exchange Commission and called for continued management attention to strengthen them.
It noted recent high-profile securities frauds that have raised questions about the internal controls that SEC has in place to help ensure that staff carry out their work completely and in a manner consistent with applicable policies and procedures.
These controls are built into office work processes used to carry out examinations, financial securities filing reviews, and investigations and range from specific supervisory review and approval activities to management reports used to monitor the processes as a whole, according to GAO-13-314.
It said for 27 internal supervisory controls the description of the control activity did not accurately reflect policy or practice, documentation demonstrating execution of the control was not complete, clear, or consistent, or the controls lacked clearly defined control activities.
Similarities in the nature of deficiencies persist among various offices, suggesting that management attention to the design and operation of internal supervisory controls is warranted, GAO said.
It called on the SEC to ensure that existing internal supervisory controls and any developed in the future have clearly defined activities and clear and readily available documentation demonstrating execution of the activities.
