The Securities and Exchange Commission still has a long way to go to correct internal weaknesses in its accounting and financial reporting procedures, according to a report by the Government Accountability Office. The GAO found that while the SEC “made some progress” in resolving the issues – namely controls over preparing financial statements and disclosures, recording and reporting disgorgement and penalty activity, and information security – the problems remain and “increase the risk that misstatement material in relation to the financial statements would not be prevented or detected on a timely basis.”

In a letter responding to the report, SEC Chairman Christopher Cox states that the agency has made “substantial progress” in addressing each GAO recommendation. Among them, writes Cox, is that the SEC is “near completion” of a comprehensive set of written procedures for financial reporting processes and related internal controls. In addition, Cox says the agency has convened working groups with representatives from various SEC departments to clarify policies and job responsibilities, as well as eliminate inaccuracies in its database and design a new financial management system.