"Fannie Mae failed to devote sufficient resources to its accounting. ... Public companies should learn from this lesson and ensure that their internal controls and accounting practices are, at a minimum, sufficient to meet their compliance obligations." The SEC's investigation is continuing and the Justice Department has been pursuing a separate criminal investigation. The report is expected to spur on legislation that would limit the portfolios of both Fannie Mae and its smaller mortgage competitor, Freddie Mac. OFHEO fined Freddie Mac a record $125 million in 2003 for misstating earnings by $5 billion -- mostly underreporting them. The holdings of the two companies currently total about $1.4 trillion. Previously on WebCPA: Fannie Mae Finds More Errors (May 10, 2006) Report Points to Former Fannie CFO (Feb 24, 2006) Bush Proposes New Regulator for Fannie, Freddie (Feb. 7, 2006)