Earlier this week, CNet News.com reported that the Government Accountability Office (GAO) audit of the SEC found that the organization, ironically, did not have effective internal control over financial reporting, pointing to weaknesses in its information security and accountancy practices. The GAO also found that the SEC's financial statements for the 2004 were kosher and that no compliance regulations were breached. But the embarrassing failure may have been the tipping point for SEC Chairman William Donaldson who abruptly announced today that he would be stepping down at the end of the month. The agency has had its fair share of problems lately--such as a $48 million budget shortfall--so to some it may be no surprise.
Meanwhile, the fallout, says Gartner, is for U.S. government CIOs and chief financial officers to "prepare for more intense scrutiny of internal controls from congressional oversight committees, the GAO and the OMB."