Brattle Report: Leadership Changes and Policy Shifts Reshape Auditor Enforcement Landscape

CHICAGO, Oct. 30, 2025 /PRNewswire/ -- According to a new report from The Brattle Group, the third quarter of 2025 marked a defining inflection point for auditor oversight in the United States. Following months of uncertainty amid leadership changes and constitutional challenges, enforcement activity and developments at the Public Company Accounting Oversight Board (PCAOB) and the US Securities and Exchange Commission (SEC) in Q3 2025 offered the first clear signs of how the new administration's priorities may reshape the enforcement landscape.

The report, Enforcement Activity Involving Auditors – 2025 Q3 Update, was authored by a Brattle team led by Principal Alison Forman and Associate Adam Karageorge. A follow-up to Brattle's 2024 Enforcement Activity Involving Auditors report, the Q3 Update analyzes overall enforcement activity from the PCAOB and the SEC during the first nine months of 2025 – comparing it to activity from 2018–2024 – and identifies developments likely to influence auditor oversight in 2026 and beyond.

"The first three quarters of 2025 were a period of transition for auditor enforcement, shaped by leadership transitions – including the swearing in of SEC Chair Paul Atkins in April – and the accompanying shift away from the aggressive enforcement stance of prior administrations," said Ms. Forman, Co-Leader of Brattle's Accounting Practice. "The muted pace of enforcement in Q3 likely foreshadows a more sustained realignment of priorities."

The authors found that, with the exception of a single action issued prior to SEC Chair Gary Gensler's resignation on January 20, 2025, the SEC did not initiate any new actions against auditors in 2025 through Q3. The PCAOB initiated 32 actions over the same period, comparable to levels in prior years, though all but one of those took place before Chair Erica Williams's departure in July.

Notable Q3 2025 developments highlighted in the report include:

• Judge Margaret Ryan was appointed Director of the SEC's Division of Enforcement, a notably unconventional pick for the Commission's top enforcement role.
• The SEC established a Cross-Border Task Force, which will initially focus on foreign companies engaged in potential US securities violations, as well as gatekeepers, such as auditors and underwriters.
• The PCAOB was spared elimination in President Trump's 2025 budget reconciliation package, after a provision to dissolve it was struck down under the Byrd Rule.
• PCAOB Chair Erica Williams resigned at the request of SEC Chair Atkins, which was followed by a call for candidates to fill all five board positions.
• The PCAOB postponed the adoption of its new quality control standard (QC 1000, A Firm's System of Quality Control), intended to strengthen audit quality, by one year. Originally scheduled to take effect on December 15, 2025, it is now set for December 15, 2026.

The authors also discuss the collective impact of these developments on future auditor enforcement.

The full report is available on Brattle's website: https://www.brattle.com/insights-events/publications/enforcement-activity-involving-auditors-2025-q3-update/.

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SOURCE The Brattle Group