THE SEC'S OPERATION BROKEN GATE INITIATIVE: INTERNAL AUDIT'S ROLE AS A GATEKEEPER

• Published in: Internal Auditing Vol. 30; no. 1; p. 20
• Main Authors: Boyle, Douglas M, Boyle, James F, Carpenter, Brian W
• Format: Trade Publication Article
• Language: English
• Published: Boston Thomson Reuters (Tax & Accounting) Inc 01.01.2015
• Subjects: Accounting firms; Audit committees; Auditing standards; Enforcement; Executives; Financial reporting; Fines & penalties; Fraud; Initiatives; Internal auditors; Internal controls; Performance evaluation; Professional standards; Professionals; Public companies; Quality control; Quality standards; SEC regulations; Whistleblowing; United States > US
• ISSN: 0897-0378

One key objective of internal control is to enable a company to produce reliable financial statements that investors and creditors can use to make informed investing and lending decisions. The Sarbanes-Oxley Act of 2002 Section 404 requires the management of public companies to assess the effectiveness of internal controls over financial reporting and (for larger companies) to also obtain an independent audit of internal controls. In 2013, the US Securities and Exchange Commission (SEC) announced an initiative called "Operation Broken Gate" to hold accountable those responsible for the fair financial reporting of public companies, including audit committees, auditors, and management. Internal auditors who maintain an objective perspective from management and take steps toward competency to effectively assist in the independent audit work will gain the trust of the external auditor to perform the audit work assignments.