SEC and PCAOB Enforcement Hit Multi-Year Lows in 2025

SEC accounting and auditing enforcement actions dropped 68% in 2025 compared to 2024. PCAOB finalized 37 disciplinary actions, down from 51 — the lowest level since 2021. For audit firms and public company accountants, this is a major shift in regulatory climate.

The Numbers

SEC brought only 10 accounting and auditing enforcement actions in 2025, down from 31 in 2024. That is the lowest level in nine years. Monetary settlements fell to $31 million, down from $907 million. Nearly all of that $31 million was imposed during former chairman Gary Gensler’s final three weeks in office.

Only four of the 10 SEC actions were initiated after Paul Atkins took over as chair in April 2025.

PCAOB monetary penalties for auditing actions totaled $17.6 million in 2025, a 50% decline from 2024. Over 98% of those penalties were finalized before former chair Erica Williams stepped down in July 2025.

Cornerstone Research noted: “Penalties imposed under Chair Williams accounted for 75% of all monetary penalties imposed by the PCAOB throughout its 23-year history.”

What Changed

Both agencies underwent leadership changes in 2025. Atkins replaced Gensler at the SEC. Williams stepped down from the PCAOB after Atkins asked her to leave. Enforcement activity often declines during administrative transitions, but 2025 activity was significantly lower than in the first years of the prior two SEC chairs.

Audit firms are reporting fewer inspection findings being escalated to formal enforcement. Public company CFOs and controllers are seeing less aggressive scrutiny on revenue recognition, internal controls, and going concern assessments.

The Open Question

Is this a staffing issue, a policy shift, or both? The drop coincides with a broader regulatory pullback across federal agencies under the Trump administration.

For firms, this changes the risk calculus for 2026. The lowest PCAOB enforcement level since 2021 means pre-pandemic inspection intensity. The 68% drop in SEC accounting cases is the steepest single-year decline in a decade.

But firms should not assume the watchdog is permanently asleep. Inspection backlogs could lead to a 2027 enforcement surge. And the leadership transitions are still fresh — new priorities could emerge as the year progresses.

For now, audit firms have breathing room. Whether that is temporary or a permanent de-escalation remains to be seen.

Source: Accounting Today, March 2026