Enforcement activity in the accounting and auditing space dropped sharply in the U.S. last year amid turnover at the helms of both the U.S. Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), according to a pair of reports from Cornerstone Research.
For the SEC, the firm reported that the regulator brought accounting or auditing enforcement actions against just 11 respondents in 2025, down by 71% from the previous year — and the SEC reached monetary settlements (including penalties, disgorgement and interest) totalling just US$31 million in 2025, down from US$907 million in 2024.
Moreover, the report noted that almost all of these settlement sanctions (98%) were reached before the new chair of the SEC was sworn in last year.
“Although enforcement activity often declines during administrative transitions, 2025 activity was significantly lower than in the first years of the prior two SEC chairs,” said Jean-Philippe Poissant, co-author of the report and co-head of Cornerstone Research’s accounting practice, in a release.
The report noted that the drop in accounting-related enforcement activity “is consistent with recent commentary by the [new] director of the division of enforcement [at the SEC], Margaret Ryan, who stated she is ‘far more concerned with the quality and impact’ of investigations than with ‘chasing numbers.'”
There was also a decline in enforcement activity by the PCAOB, the firm noted in a separate report — although these declines in year-over-year activity returned enforcement to levels that were consistent with recent historical averages.
According to the report, the auditor oversight agency finalized 37 enforcement actions in 2025, which was down by 27% compared with the previous year — but in line with the average number of cases for the 2020–2024 period (36).
And, while the monetary penalties levied by the PCAOB dropped by about 50% from the prior year to US$17.6 million in 2025, the total actually represented an increase for the average US$13.7 million recorded for the 2020–2024 period.