The Brattle Group's recent report examines enforcement activity against auditors by the SEC and PCAOB in the first three quarters of this year.
The report also spotlights key developments in the third quarter of 2025 such as leadership shifts, constitutional uncertainty, and fresh initiatives. These factors could potentially affect the enforcement environment.
The report also mentioned that the PCAOB experienced a never-before-seen challenge to its institutional stability, with its existence questioned in the first half of 2025.
The report found that the PCAOB imposed penalties of over $17.4 million in the first three quarters of 2025,
which exceeds the total annual penalties imposed by the PCAOB every year except 2023 and 2024. All but $100,000 was imposed before ex-Chair Erica Williams’s resignation on Jul. 22.
Close to two-thirds of Q1–Q3 2025 penalties ($11.25 million) were imposed on four foreign affiliates of Big Four firms for violations that had to do with improper answer sharing.
The report noted that after President Donald Trump's inauguration and SEC Chair Gary Gensler's departure last
January, the SEC operated under interim leadership until Paul Atkins was sworn in as chair on April 21. Atkins has been known for his bias toward deregulation and against PCAOB.
Atkins did not appoint a permanent Enforcement Director for the SEC until September, when Judge Margaret “Meg” Ryan assumed that role. At the PCAOB, Williams left her position in July. and George Botic was named acting chair, which marked the beginning of the board's total revamp.