At a time when the future of the Public Company Accounting Oversight Board (PCAOB) appears uncertain, a recent report shows that the agency’s enforcement activity levels in 2024 were a multi-year highs and the agency’s monetary recoveries were at all-time highs. The agency’s enforcement actions are detailed in a Cornerstone Research report entitled “Public Company Accounting Oversight Board (PCAOB) Enforcement Activity: 2024 Year in Review,” which can be found here. Cornerstone Research’s February 26, 2025, press release about the report can be found here.

The PCAOB was created by the Sarbanes-Oxley (SOX) Act to provide independent oversight of the auditors of U.S. public companies. The agency is empowered to investigate and discipline registered public accounting firms and their associated persons for violations of applicable laws, rules, or professional standards. As required by SOX, the PCAOB keeps its investigations and disciplinary proceedings confidential until the matter is settled or otherwise final. The PCAOB’s enforcement actions are largely of two types: (1) enforcement actions related to the performance of an audit; and (2) PCAOB oversight actions, involving violations of registration and reporting rules or non-cooperation with a PCAOB inspection nor investigation.

According to the report, the PCAOB finalized 51 reporting actions in 2024, an increase of nearly 11% over the 46 actions in 2023, and nearly 60% above the 2019-2023 annual average of 32 finalized actions. The 51 finalized actions in 2024 is the highest number of finalized enforcement actions since 2017 (when there were 55 total finalized enforcement actions).

Of the 51 finalized enforcement actions in 2024, 40 involved auditing actions, about 8% more than the 37 auditing actions in 2023, and 66% above the 2019-2023 average annual number of auditing actions of 24. The 40 auditing actions finalized in 2024 is the highest annual number of auditing actions since 2017, when there were 43. The majority of the auditing actions finalized in 2024 were finalized in the first half of the year; only 10 auditing actions were finalized after the SEC v. Jarkesy decision on June 27, 2024.

Of the 40 auditing actions finalized in 2024, 17 involved non-U.S. respondents, while 23 involved U.S. respondents. The 17 actions involving non-U.S. respondents involved firms and/or individuals from 13 different countries.

During 2024, 80% of the auditing actions alleged violations of Auditing Standards. One in five actions involved not only violations of Auditing Standards, but also alleged violations of Ethics and Independence, and Quality Control Standards. All of the non-U.S. auditing actions during 2024 involved alleged violations of Auditing Standards and/or Quality Control Standards.

The 51 enforcement actions finalized in 2024 resulted in $35.7 million in total monetary penalties, a record number for annual monetary recoveries. Indeed, the $35.7 million recovered in 2024 represents 38% of the total of $94 million the PCAOB has recovered since its inception. Of the $35.7 million recovered in 2024, $34.1 was recovered in auditing actions (nearly twice the $18.8 million recovered in auditing actions in 2023). Though the auditing actions involving non-U.S. respondents accounted for less than half of the total number of 2024 auditing actions, they accounted for more than 80% of the 2024 monetary penalties ($28.6%). Nearly 90% of the total monetary penalties the PCAOB imposed in 2024 were imposed on just five respondents.

The PCAOB also has the authority to impose non-monetary sanctions. Nearly three-quarters of firm respondents in 2024 auditing actions were required to undertake remedial actions, including actions related to quality control policies and procedures and training. About one-fifth of firm respondents in 2024 auditing actions had their registration revoked on a temporary (14%) or permanent basis (7%).

Discussion

Overall, the 2024 statistics appear to reflect an agency that has been taking an active and arguably even aggressive enforcement approach. These statistics could take on a new light in the context of the deregulatory approach favored by the Trump administration. It could be argued that right now is not a great time for a business-related regulatory agency to projecting a profile as an aggressive enforcer.

Indeed, questions have already been raised publicly about the future of the PCAOB under the Trump administration. Some commentators have suggested that under the new administration the PCAOB may be eliminated or the agency, or least part of it, will be incorporated into the SEC.

It is no secret that Paul Atkins, President Trump’s nominee as SEC Chair, has expressed skepticism about the PCAOB. He has advocated for eliminating the PCAOB and transferring its responsibilities back to the SEC. Atkins believes that this move could reduce redundancy and lower costs, arguing that the PCAOB has not significantly improved audit quality.

In short, while the statistical information about PCAOB activity in 2024 paints in interesting picture, the PCAOB’s picture going forward could look quite different. Just one of many, many things that could change in the weeks and months ahead.