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Office of Audits » Overview

The Office of Audits conducts, coordinates and supervises independent audits and evaluations related to the Securities and Exchange Commission’s (Commission) internal programs and operations at its headquarters and 11 regional offices.  The Office of Audits also hires contractors and subject matter experts, as appropriate, to conduct work on behalf of the Office of Inspector General (OIG). 

Audits and Evaluations

The primary purpose of conducting an audit or evaluation is to review past events with a view toward ensuring compliance with applicable laws, rules and regulations and improving future performance. Upon completion of an audit or evaluation, the OIG issues an independent report that identifies any deficiencies in particular Commission operations, programs, activities, functions or organizations and includes recommendations for improvements in existing controls and procedures. Specifically, audits and evaluations are conducted to assess whether:

• Resources are safeguarded and appropriately managed;
• Governing laws, regulations, and policies are complied with;
  
• Funds are expended properly;
  
• Desired program results are achieved; and
  
• Information provided by the Commission to the public and others is reliable.

The Office of Audits advises Commission management on findings of its audits and evaluations, as well as recommendations and the corrective actions the OIG believes management should undertake. The Office makes recommendations that are designed to correct identified deficiencies to ensure programs achieve their intended results, and to promote economy, efficiency, effectiveness, and the public’s integrity in the administration of the Commission programs.

Audits

Audits examine operations and financial transactions to ensure that proper management practices are being followed and that resources are being adequately protected in accordance with laws, rules and regulations. Audits are systematic, independent and documented processes for obtaining evidence.

In general, audits are conducted when firm criteria or data exist, sample data is measurable, and testing internal controls is an integral component of the objectives. Our audits focus on Commission programs and operations related to areas such as the oversight and examination of regulated entities, the protection of investor interest, and the evaluation of administrative activities. Audits are conducted in compliance with OIG policy, generally accepted government auditing standards issued by the Comptroller General of the United States (the Yellow Book), as well as guidance issued by the President’s Council on Integrity and Efficiency (PCIE) and Executive Council on Integrity and Efficiency (ECIE) .

Evaluations

The Office of Audits conducts evaluations when non-audit services or consulting services are rendered to the agency, or when a project’s objectives are based on specialty and highly technical areas. Evaluations are reviews that typically cover broad areas and are designed to provide Commission management with timely and useful information associated with current or anticipated problems.

Evaluations are conducted in accordance with OIG policy, the non-audit services standards contained in the Yellow Book, or guidance issued by the PCIE/ECIE.

Advisory Services and Audit Follow-up

In addition to performing audits and evaluations, the Office of Audits provides a variety of advisory services to management. The Office:

• Monitors the internal system that tracks management’s implementation of the corrective actions that are recommended in OIG reports.
  
• Performs audit resolution and follow-up activities for recommendations identified in OIG reports.
  
• Conducts external peer reviews of other OIGs, according to the cycle that is established by the PCIE/ECIE.