The U.S. Securities and Exchange Commission is creating a new enforcement unit focused on accounting and auditing violations, signaling a shift in how U.S. regulators oversee corporate financial reporting.
According to job postings and a source familiar with the matter, the new team will concentrate on enforcing rules tied to the Sarbanes-Oxley Act, a landmark law introduced after major accounting scandals such as Enron and WorldCom.
The unit — referred to internally as a “SOX group” — will investigate and litigate potential breaches of auditing standards, professional conduct rules, and federal securities laws related to financial reporting.
The move suggests the SEC may be preparing to take on responsibilities traditionally handled by the Public Company Accounting Oversight Board, a nonprofit regulator created by Sarbanes-Oxley to oversee auditors of public companies.
In recent months, the PCAOB has come under pressure in Washington, particularly among Republican policymakers who have criticized it as overly costly and burdensome for businesses.
Under SEC Chairman Paul Atkins, the agency has already reduced the PCAOB’s budget and signaled openness to absorbing more of its functions. Lawmakers previously floated proposals that could effectively dismantle the watchdog altogether.
At the same time, the PCAOB has reportedly offered buyouts to some staff, raising further questions about its long-term role.
An SEC spokesperson said the new hires are intended to strengthen enforcement efforts and target misconduct within the auditing profession.
“Auditors are critical gatekeepers,” the spokesperson said, emphasizing their role in maintaining market integrity and preventing fraud.
The restructuring comes amid broader changes at the SEC. The agency has reduced staffing levels and adjusted enforcement priorities, while also stepping back from several high-profile cases in recent months.