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ARTICLE · 26 MAY 2023

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Steep Increase In Accounting Enforcement Activity Reported —Especially Against Individuals

Cooley LLP
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In this report from Cornerstone Research, SEC Accounting and Auditing Enforcement Activity—Year in Review: FY 2022, Cornerstone tells us that accounting and auditing enforcement activity...

United StatesAccounting and Audit
Cydney Posner
Cydney Posner
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In this report from Cornerstone Research, SEC Accounting and Auditing Enforcement Activity—Year in Review: FY 2022, Cornerstone tells us that accounting and auditing enforcement activity by the SEC increased sharply in FY 2022, although surprisingly, the aggregate amount of monetary settlements declined sharply. Perhaps most interesting is the steep increase in actions against individuals, reportedly reflecting the emphasis of SEC Chair Gary Gensler on imposing individual accountability and perhaps, by extension, spurring action by executives to prevent misconduct at their companies. The report found that over "half of all actions involved individual respondents only, a sharp increase from the FY 2017–FY 2021 average of 37%. Following Chair Gary Gensler's swearing-in [in April 2021] through the end of FY 2022, approximately 49% of actions were initiated against individual respondents only." According to one of the co-authors of the report, "[u]nder Chair Gensler's

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