PCAOB Enforcement Activity in 2024 Reached Highest Level Since 2017 as Monetary Penalties Hit New Record for the Third Consecutive Year

Enforcement was higher during Biden administration compared to first Trump administration.

, /PRNewswire/ -- The Public Company Accounting Oversight Board (PCAOB) continued to expand its enforcement in the final year of the Biden administration, reaching the highest level of enforcement actions since 2017, according to a new report released by Cornerstone Research. Monetary penalties imposed by the PCAOB reached a new record for the third consecutive year.

The report, PCAOB Enforcement Activity—2024 Year in Review, found that the PCAOB publicly disclosed 51 total enforcement actions, including 40 actions involving the performance of an audit (Auditing Actions). Most of these actions came in the first half of the year, with only 10 Auditing Actions finalized after the U.S. Supreme Court ruled against the use of administrative law judges in SEC v. Jarkesy. At $35.7 million, total monetary penalties in 2024 marked a 78% increase over 2023 and represented nearly 40% of all monetary penalties imposed since the PCAOB's inception.

"The PCAOB continued aggressive enforcement in 2024, finalizing 30 Auditing Actions in the first half of 2024, more than triple the number of actions finalized in the first half of 2023," said Jean-Philippe Poissant, a report coauthor and cohead of Cornerstone Research's accounting practice. "In one in five Auditing Actions, the PCAOB alleged violations of not only Auditing Standards, but Quality Control Standards and Ethics and Independence, as well."

The report also compares PCAOB enforcement under the Biden administration (January 20, 2021–December 31, 2024) to that of the first Trump administration (January 20, 2017–January 19, 2021). Under the Biden administration, the PCAOB finalized 160 total actions, including 124 Auditing Actions, compared to 126 and 101, respectively, under the Trump administration. Total monetary penalties imposed were nearly seven times higher during the Biden administration, reaching approximately $68 million compared to just over $10 million during the Trump administration.

"The type of respondents in enforcement actions shifted from a majority of individual respondents during the Trump administration to a near even split between individual and firm respondents during the Biden administration," added Russell Molter, a principal at Cornerstone Research and report coauthor. "Additionally, the percentage of respondents fined in Auditing Actions climbed from a little over half (59%) to nearly all respondents (94%)."

As 2024 marks the 20th year since the PCAOB finalized its first enforcement action, the report also provides comprehensive analysis of the agency's enforcement results. In these 20 years, the PCAOB finalized 487 total actions involving 675 respondents, the majority of which (344) were individuals. The PCAOB has imposed $94 million in monetary penalties since its inception.

Key Trends:

• The number of Auditing Actions involving U.S. respondents grew in 2024, but those involving non-U.S. respondents did not.
• For the first year since 2021, there were Auditing Actions in 2024 that referred to a company's disclosure of a material weakness in internal control.
• In over half of the 2024 Auditing Actions (52%), the PCAOB alleged violations of Quality Control Standards.
• 11% of firm respondents in 2024 Auditing Actions were required to retain an independent consultant, down from 15% in 2023.

About Cornerstone Research
Cornerstone Research provides economic and financial consulting and expert testimony in all phases of complex disputes and regulatory investigations. The firm works with an extensive network of prominent academics and industry practitioners to identify the best-qualified expert for each assignment. With a reputation for high quality and effectiveness, Cornerstone Research has consistently delivered rigorous, state-of-the-art analysis since 1989. The firm has more than 1,000 professionals in nine offices across the United States, UK, and EU.

SOURCE Cornerstone Research