The SEC's internal controls problems

According to the WSJ, the GAO

said three material weaknesses in the SEC's internal controls, which were found in an audit of the SEC's 2004 financial statement, remained in place when the government-watchdog agency did its audit of the SEC's 2005 results.. . . . The GAO said that for some SEC line items, detailed information supporting the balances and underlying transactions weren't readily available and were hard to retrieve.

Unfortunately, the SEC is not subject to SOX, and therefore obviously has no incentive to fix these problems. Perhaps this episode will persuade Congress to shut down the SEC and turn its work over to the private sector, which is subject to SOX.