SEC Sharpens Its Focus on Accounting and Financial Reporting Enforcement

Home » Insights » SEC Sharpens Its Focus on Accounting and Financial Reporting Enforcement

Experienced accounting and investigative support can help you respond effectively — and identify issues before they escalate.

On August 5, 2026, the Securities and Exchange Commission (SEC) announced the formation of a specialized Financial Reporting and Accounting Unit within its Division of Enforcement. The new unit will bring together attorneys and accountants with specialized knowledge of financial reporting, accounting, auditing and securities regulation. Its stated mandate includes pursuing financial reporting fraud, accounting misconduct and auditor misconduct.

For public companies, audit committees, accounting firms and their outside counsel, the message is clear: accounting judgments, internal controls, financial reporting decisions and independent auditor opinions are under greater technical scrutiny during SEC investigations.

In today’s enforcement environment, every public company and its counsel should have trusted forensic accountants and technical Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS) specialists ready to engage the moment accounting questions arise. The ability to rapidly assess the facts, understand the technical accounting implications and develop a defensible response can significantly influence the course of an investigation.

PKF O’Connor Davies brings together former Big Four professionals with deep forensic, technical accounting and regulatory experience, enhanced by AI-powered investigative and document review tools. We also have practicing auditors with prior Public Company Accounting Oversight Board (PCAOB) inspection and SEC examination experience to help companies and their counsel perform early case assessments, evaluate accounting positions, identify potential exposure, communicate effectively with auditors and regulators, and implement remediation plans that strengthen governance and position organizations for successful resolution.

Bridging the Gap Between Legal Strategy and Accounting Evidence

Accounting investigations frequently require more than identifying whether an entry was technically correct. Counsel may need to understand:

• How a transaction was evaluated and recorded
• Whether management’s judgments were reasonable and adequately documented
• Whether internal accounting policies were consistent with applicable technical guidance
• What information was presented to auditors, audit committees and senior management
• Whether internal controls and governance processes operated as intended
• How the accounting treatment affected public disclosures and financial statements

Our professionals bring former Big Four audit, former PCAOB, former SEC Examiner and extensive investigative experience to these matters. We work alongside counsel to translate complex accounting records, technical guidance, audit documentation and internal communications into a clear and defensible factual analysis. We have implemented effective document management, AI-assisted processes to streamline investigations and provide counsel with an efficient early case assessment and the company with priorities for remediation.

How We Support Companies and Their Counsel

Our professionals bring decades of experience from Big Four accounting firms, the PCAOB, forensic investigations and complex accounting advisory engagements. We work seamlessly alongside in-house and outside counsel to provide the accounting expertise necessary to respond confidently to regulatory scrutiny.

Our services include:

Internal Investigations and Accounting Malfeasance

We investigate allegations of accounting irregularities, financial reporting misconduct, management override, revenue recognition issues, reserve adequacy, asset valuation, expense classification and internal control failures. Our objective is to establish the facts quickly while preserving the integrity of the investigation.

SEC Investigations and Enforcement Matters

We assist companies and their legal counsel in responding to SEC inquiries, subpoenas, Wells Notices and other enforcement matters by evaluating accounting positions, reconstructing transactions, organizing financial evidence and preparing technically sound analyses that support counsel’s legal strategy. Our partners are uniquely positioned as former Big Four auditors and former SEC examiners to assist with the analysis and response.

Technical Accounting Analysis

Many enforcement matters hinge on complex accounting judgments rather than obvious fraud. We provide independent analyses of GAAP application, accounting estimates, financial statement presentation and disclosure decisions, helping management and counsel understand both the technical accounting and the associated regulatory risk.

Auditor and Audit Committee Support

Our professionals facilitate technically informed discussions with external auditors, audit committees and internal accounting teams. We help evaluate significant accounting positions, address auditor concerns and strengthen the documentation supporting key accounting judgments.

Governance and Remediation

When issues are identified, we assist companies in strengthening governance, improving accounting policies, enhancing documentation, evaluating internal controls and implementing practical remediation measures designed to withstand regulatory scrutiny.

The Value of Early Involvement

The SEC’s new unit is designed to provide greater dedicated expertise and capacity in accounting and financial reporting enforcement. In this environment, companies and their counsel should be prepared to explain not only the accounting conclusion reached, but also the process, evidence, professional judgment, internal controls and governance supporting that conclusion.

Early involvement by experienced accounting professionals can help:

• Identify the most consequential accounting and control issues
• Preserve and organize relevant financial evidence
• Test management’s explanations against the underlying records
• Anticipate questions from regulators and auditors
• Distinguish technical errors from potential misconduct
• Develop a consistent and supportable factual record
• Recommend practical remediation where appropriate

Experienced Support for Companies and Their Counsel

When accounting issues intersect with regulatory enforcement, companies need advisors who understand both the technical accounting standards and the investigative process. Our team combines former Big Four auditor, PCAOB Inspector and SEC Examiner experience with extensive forensic accounting and investigative expertise, including former FBI financial crimes, to help companies and their counsel navigate complex accounting matters, support interactions with regulators and auditors and strengthen financial reporting governance before issues become enforcement actions.

Whether the need involves a proactive technical accounting review, an internal investigation, an SEC inquiry or a challenging discussion with auditors, we provide independent analysis that helps you understand the facts, evaluate exposure and determine the appropriate path forward.

Contact Us

To discuss how our forensic and technical accounting professionals can support you, please contact your PKF O’Connor Davies client service team or:

Elisabeth da Silva, CPA, CFF
Partner, Forensics & Internal Investigations Leader
edasilva@pkfod.com | 781.937.6792

Rachel DiDio, CPA
Partner, Assurance Leader and Former PCAOB Inspector
rdidio@pkfod.com | 959.947.3941

Don Melody, CPA, CFF
Partner, Assurance and Former SEC Examiner
dmelody@pkfod.com | 646.893.0178

Darryl Wegner, JD
Managing Director, Forensics and Retired FBI Special Agent
dwegner@pkfod.com | 781.859.9949