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The U.S. Securities and Exchange Commission (SEC) drastically reduced its accounting and auditing enforcement activity in fiscal year 2024, the final year of Gary Gensler’s administration, ending two consecutive years of annual increases. In contrast to other SEC priorities under Chair Gensler, such as cryptocurrency and off-channel communications, accounting and auditing enforcement activity generally declined.
Compared to four-year period (FY 2017–FY 2020) under Jay Clayton, who was the SEC Chair during the first Trump administration, the SEC accounting and auditing enforcement activity under the Gensler period (FY 2021–FY 2024) declined in terms of total number of actions initiated or settled. The average total settlement amount per year during the Gensler period also declined to $647 million, down from $796 million imposed during the Clayton period.
As we look at the new SEC priorities during the second Trump administration, these trends highlight the dynamic nature of enforcement and the influence of changing leadership and priorities on overall activity.
Key issues that will be covered in this course are:
- Understand the overall decline in SEC accounting and auditing enforcement actions and how these changes reflect shifting regulatory priorities.
- Compare trends in accounting and auditing enforcement and settlement activity between SEC administrations.
- Learn how changes in accounting and auditing enforcement priorities impact the amount and composition of monetary penalties, preparing for future regulatory developments.