SEC and PCAOB Accounting and Auditing Enforcement Observations, Analysis & Insights

Published on: Sep 02, 2021

Credibility International is pleased to release its second study of U.S. Securities and Exchange Commission (“SEC”) and Public Company Accounting Oversight Board (“PCAOB”) enforcement activity related to public-company issuer accounting, disclosure, audit failure, and auditor independence enforcement matters for activity during calendar year 2020.

The preparation of the study was led by Credibility International’s President Michael Maloney, who served as Chief Accountant of the SEC’s Division of Enforcement from 2014 through 2018, and Ryan Wolfe of Credibility who served in the SEC’s Office of the Chief Accountant from 2011 through 2020.  Mr. Maloney and Mr. Wolfe’s unique expertise in SEC and PCAOB enforcement matters is reflected in the study’s data analysis, observations, and insights.

The study is based on SEC Accounting and Auditing Enforcement Releases and PCAOB Disciplinary Orders issued during the period January 1, 2020 through December 31, 2020. Among other things, the study includes analysis of:

  • Overall enforcement activity levels of the respective enforcement programs, including major themes:
    • Revenue recognition and related disclosures
    • Internal controls and disclosure controls and procedures
    • Auditors and other gatekeepers
    • Cooperation credit and remediation
    • Audit firm quality controls
    • Areas to watch, including asset impairment, valuation, earnings/EPS management, blank check companies, and COVID accounting and disclosures
  • Financial reporting enforcement matters brought by the SEC, including data and trends, including categorization by:
    • Unique matters
    • Type of matter
    • Primary GAAP issue
    • Matters alleging fraud vs. non-fraud
    • Resolution type (settlement versus litigation)
  • Auditing enforcement matters brought by both the SEC and the PCAOB, including data and trends, including categorization by:
    • Unique matters
    • Individuals vs. firms
    • Length of suspensions
    • Frequency of professional standards violations
  • Detailed case summaries of notable cases and resolutions achieved


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