Cornerstone Research Connects: 2019 Accounting and Auditing Enforcement Activity

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Cornerstone Research Connects is the firm’s podcast series in which we interview Cornerstone Research staff and in-house experts about their research and what the data can tell us about litigation trends. The authors discuss this latest report and some of its key findings.

Elaine Harwood and Alison Forman, coauthors of the report, Accounting and Auditing Enforcement Activity—2019 Review and Analysis, join Laura Simmons to discuss their recent findings, including:

  • The overall level of enforcement activity during 2019, which saw a decrease in SEC actions but an increase in PCAOB actions.
  • The increased number of enforcement actions involving announcements of restatements or material weaknesses in internal controls.
  • Trends in enforcement actions brought against non-U.S. respondents at the SEC and PCAOB.
  • The most common allegation types brought by the SEC and PCAOB.
  • Settlement activity at the SEC and PCAOB, including an increase in the median settlement amount in 2019 at both agencies.
About Accounting and Auditing Enforcement Actions

In this report, accounting and auditing enforcement actions include (1) SEC Accounting and Auditing Enforcement Releases (AAERs) listed in the SEC Division of Enforcement Annual Reports and available on the SEC’s website at https://www.sec.gov, and (2) PCAOB settled and adjudicated disciplinary orders available on the PCAOB’s website at https://pcaobus.org. SEC actions exclude follow-on administrative proceedings. SEC and PCAOB auditing actions exclude actions unrelated to the performance of an audit (e.g., failure to register with the PCAOB or to timely disclose certain reportable events to the PCAOB). See the report for more information.


The views expressed in this podcast are solely those of the speakers, who are responsible for the content, and do not necessarily represent the views of Cornerstone Research.

Speakers

  • Los Angeles

Elaine M. Harwood

Senior Vice President

  • Chicago

Alison M. Forman

Principal

  • Washington

Laura E. Simmons

Senior Advisor