Report
January 31, 2024
2023 Enforcement Activity Involving Auditors
Auditor enforcement remained high in 2023 with 60 actions, up nearly 60% from 2018–2021 levels, with the PCAOB in particular breaking records as it imposed monetary sanctions totaling over $20 million, the highest penalties in PCAOB history. Notably, more than half of the PCAOB’s total penalties in its 19-year enforcement history have been imposed in the last two years.
Other notable findings in the report include:
- Together, the PCAOB and SEC imposed $31.5 million in monetary sanctions against auditors in 2023, a steep decline from $138.5 million in 2022 but 53% higher than the 2018–2021 average
- The PCAOB imposed record penalties in 2023, totaling over $20 million – up 82% from its 2022 record of $11 million
- Violations of auditing standards remained the most common allegation in 2023, seen in 67% of initiated PCAOB actions and 86% of SEC actions
- For the second straight year, the PCAOB brought half of its actions against non-US respondents, including the first settlements with firms based in China and Hong Kong after the PCAOB secured historic access to these firms in 2022
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In this episode of The Brattle Exchange, Adam and Alison bring their extensive experience in handling matters involving auditor liability to provide a nuanced analysis of the evolving enforcement landscape.
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