Oklahoma's U.S. Senator Tom Coburn Criticizes SEC Leaders over Accountability Standards
Francis-Smith, Janice, THE JOURNAL RECORD
U.S. Sen. Tom Coburn, R-Okla., wants to know who's watching the watchdog. So he held a hearing Wednesday examining the financial management of the federal Securities Exchange Commission - the agency charged with enforcing accountability standards for publicly traded companies.
Either this system was gamed, or somebody is totally incompetent, Coburn told Jim McConnell, executive director of the SEC, in reference to the findings of the commission's first-ever audit, conducted by the U.S. Government Accountability Office.
The audit found that security was lax on protecting the sensitive information stored by the commission, and accounting errors call into question more than a billion dollars in disgorgements and penalties imposed on private businesses.
But David Walker, comptroller general of the Government Accounting Office, said the audit did reveal some positives for the agency, and since the audit was completed in May, improvements are already being implemented. The commission was given a clean opinion on its financial statements, but an adverse opinion on internal controls, which were so poor in some areas that the reliability of the agency's data has been called into question.
The SEC did earn a clean opinion on its financial statements, said Walker. I think that's quite an accomplishment. The fact of the matter is that most of the agencies in the federal government who undertook their first audit did not earn a clean opinion the first time out.
But considering that the SEC is charged with enforcing the provisions of the Sarbannes-Oxley Act, which raised the standards for corporate accountability, Coburn said the commission should lead by example.
We really do want to be the gold standard, said McConnell.
The GAO audit found that while the commission tracks information on more than 12,000 parties in cases involving penalties and disgorgements (that is, cases where the company has to pay back ill- gotten gains), the case-tracking system is not designed for financial reporting and is not integrated with the commission's accounting system. Lack of …
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Publication information: Article title: Oklahoma's U.S. Senator Tom Coburn Criticizes SEC Leaders over Accountability Standards. Contributors: Francis-Smith, Janice - Author. Newspaper title: THE JOURNAL RECORD. Publication date: July 28, 2005. Page number: Not available. © 2009 THE JOURNAL RECORD. Provided by ProQuest LLC. All Rights Reserved.