SEC does audit:
The Securities and Exchange Commission (SEC) serves as the administer of federal securities laws in the U.S. Basically, SEC oversight ensures that securities markets operate in a just and systematic manner, that securities professionals are fair to their clients, and that all corporations make material information readily available so that investors have the proper information with which to make decisions. An SEC audit is a way for the SEC to ensure that firms comply with the rules and regulations it has set forth.
Regular audits are a routine event in the investment business. An SEC audit is considered to be almost inevitable for any investment adviser. SEC compliance should be a critical part of any firm’s day-to-day operations, as a negative audit can lead to such consequences as a deficiency letter, sanctions, consumer mistrust, or worse.
