Accounting and auditing enforcement activity dropped sharply last year at both the Securities and Exchange Commission and the Public Company Accounting Oversight Board, according to two new reports from Cornerstone Research.
In 2025, the SEC brought 68% fewer accounting and auditing actions than in 2024, and the PCAOB finalized 27% fewer actions over the same period.
The declines in enforcement occurred during a year marked by leadership transitions at both agencies.
Paul Atkins, a former SEC commissioner from 2002 to 2008, took over as the Trump administration’s chairman of the financial markets watchdog last April, following the resignation of Biden-era SEC chief Gary Gensler, who was often criticized by Republicans and financial firms for being too aggressive in pursuing an expansive regulatory agenda.
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After being sworn in, Atkins was expected to fall in line with the Trump administration’s plans to dial back regulations and shrink government agencies. While a change in administration is typically associated with a decrease in enforcement activity, 2025 activity at the SEC was markedly below the numbers of actions initiated during the prior two chairs’ first years, according to Cornerstone Research.
During Atkins’ first year in office, the SEC initiated only 10 accounting and auditing enforcement actions, down from 31 in 2024 and its lowest level in nine years.
For comparison, 17 actions were initiated in 2017 after Jay Clayton was sworn in as SEC chief on May 4, 2017, and 30 actions were initiated in 2021 after Gensler assumed the role on April 17, 2021.
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Other key findings from Cornerstone Research’s analysis of SEC enforcement activity in 2025 include:
- Monetary settlements fell sharply to $31 million, down from $907 million in 2024.
- Almost all (98%) the $31 million of 2025 settlements was imposed during Gensler’s final three weeks in office.
- Only four of the 10 actions in 2025 were initiated after Atkins became chair in April.
At the PCAOB, which is overseen by the SEC, its chair Erica Williams stepped down from the role last July after being asked to resign by Atkins.
During her tenure as head of the PCAOB, Williams had taken a tougher enforcement approach than her predecessor, William Duhnke, including conducting sweeps, which allows the board to collect information on potential auditing violations from several accounting firms at the same time, while also updating outdated auditing standards and making inspection reports more transparent to investors.
The PCAOB imposed record fines on audit firms under Williams’ tenure, but the board faced criticism from some in the accounting profession that it had unfairly focused on minor infractions.
She was replaced on an interim basis by PCAOB board member George Botic last July. Demetrios “Jim” Logothetis, a 40-year veteran of Ernst & Young who retired as an audit partner from the Big Four accounting firm in 2019, was announced as the PCAOB’s new chairman on Jan. 30, 2026. He was sworn in on Feb. 10.
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The PCAOB finalized 37 enforcement actions in 2025, down from 51 in 2024, which is its lowest number since 2021.
Other key findings from Cornerstone Research’s analysis of PCAOB enforcement activity in 2025 include:
- Of the 37 total enforcement actions, 33 involved the performance of an audit (auditing actions), an 18% decrease from the prior year.
- Monetary penalties for auditing actions totaled $17.6 million, a 50% decrease from 2024.
- Accounting firms comprised over two-thirds of total respondents in 2025 auditing actions, up from approximately one-half in 2024.
- Of the $17.6 million in total monetary penalties imposed in 2025, more than 98% were finalized before Williams stepped down on July 22, 2025.
“Consistent with SEC trends, PCAOB enforcement activity declined under the new chair,” Russell Molter, a principal at Cornerstone Research and report coauthor, said in a statement. “Interestingly, penalties imposed under chair Williams accounted for 75% of all monetary penalties imposed by the PCAOB throughout its 23-year history.”
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