What GAO Found
GAO found (1) the United States Securities and Exchange Commission’s (SEC) and its Investor Protection Fund’s (IPF) financial statements as of and for the fiscal years ended September 30, 2015, and 2014, were presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles; (2) SEC maintained, in all material respects, effective internal control over financial reporting for SEC and for IPF as of September 30, 2015; and (3) no reportable noncompliance for fiscal year 2015 with provisions of applicable laws, regulations, contracts, and grant agreements GAO tested. During fiscal year 2015, SEC made progress in addressing internal control deficiencies GAO reported in fiscal year 2014. Specifically, SEC sufficiently addressed the deficiencies in its accounting for disgorgement and penalty transactions such that GAO no longer considers the remaining control deficiencies in this area, individually or collectively, to represent a significant deficiency as of September 30, 2015. In commenting on a draft of this report, SEC’s Chair expressed her pleasure that GAO found that SEC remediated the significant deficiency identified in 2014 related to accounting for disgorgement and penalties. The Chair also stated that accounting for disgorgement and penalties will continue to be an area of focus for SEC in the coming year.
Why GAO Did This Study
The Accountability of Tax Dollars Act of 2002 requires that SEC annually prepare and submit audited financial statements to Congress and the Office of Management and Budget. The Securities Exchange Act of 1934, as amended in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), requires SEC to annually prepare and submit a complete set of audited financial statements for its IPF to Congress. In accordance with the authority conferred in the Chief Financial Officers Act of 1990, as amended by the Government Management and Reform Act of 1994, GAO audited the SEC and IPF financial statements. Section 963 of the Dodd-Frank Act further requires that (1) SEC annually submit a report to Congress describing management’s responsibility for internal control over financial reporting and assessing the effectiveness of such internal control during the fiscal year, (2) the SEC Chairman and Chief Financial Officer attest to SEC’s report, and (3) GAO attest to and report on the assessment made by SEC. Accordingly, this report also includes GAO’s reporting in response to the requirement under the Dodd-Frank Act.
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