September 8, 2026 - Will Accounting/Audit Task Force History Repeat Itself?

‍The SEC’s new accounting and audit task force has generated a good deal of chatter about what it means for issuers, auditors, and the securities enforcement bar. For clues, one might be tempted to look back in time. In July 2013, the SEC established a financial reporting task force headed up by David Woodcock, who is now the Director of the entire Enforcement Division. Over the following seven years, there was a significant uptick in SEC accounting/auditing actions. So, should we expect a re-run? I think it’s unlikely.

I was a trial attorney in the SEC’s Division of Enforcement when it established the 2013 version of the Financial Reporting and Audit Task Force. Unlike most SEC Enforcement initiatives, it is not entirely clear what prompted the task force’s creation. Investigations into the post-Enron accounting scandals had long since been in the books. That said, the financial crisis investigations that had dominated Enforcement’s docket were wrapping up, there was a drift back to “bread and butter” cases, and accounting enforcement actions had dipped to historic lows. In fiscal 2012, for example, the SEC filed issuer reporting and disclosure cases against just 49 individuals and entities.

Whatever the motivation, the task force certainly made waves over the next seven years. From 2013 through 2020, the SEC filed accounting-related cases against some 590 individuals and entities – that’s over 80 per year, up more than 60% compared to 2012. While there was no announcement disbanding the task force, accounting/auditing investigations largely tapered off by 2020 and 2021. The culprits: the COVID pandemic, and an intense focus on then-new areas such as crypto and off-channel communications at regulated entities.   

The SEC’s August 2026 announcement that it is setting up another accounting/audit task force has two strong parallels with the 2013 headlines: (1) the creation of a task force without a crisis to explain it; and (2) Mr. Woodcock, who has an accounting background, at the helm. But there are other factors that may make this time different. We don’t know how many staff members (attorneys, forensic accountants) are currently assigned to the new unit, how that number stacks up against the prior task force, or how aggressive this iteration will be. It’s worth noting that, earlier this year, the Enforcement Division lost delegated authority to initiate investigations; in other words, to issue document subpoenas or compel sworn testimony, Enforcement staff must now successfully petition the commissioners for the power to do so, which encourages the Commission itself to meter Enforcement. Consider, too, that the current task force’s life span may well be shorter than its predecessor – the 2028 election will bring a new president, which often means realigned priorities at the Commission and within the Enforcement Division. On the other hand, AI seems exceptionally well-suited to spotting suspicious financial statements and disclosures, especially when paired with the SEC’s impressive internal expertise. 

What this task force ends up doing is obviously anybody’s guess, but here are a few predictions (by way of comparing this task force with its predecessor):

(1) Investigations will be more targeted.

(2) Filed cases will be fewer in number, and will almost certainly feature particularly strong evidence of scienter.

(3) The SEC will be inclined to let the PCAOB deal with auditors who could have done better but weren’t in on the fraud.

(4) The task force will have a shorter overall lifespan, given increasingly common upheavals in the financial sector and the political storms they create (think prediction markets, for example), and the 2028 election.   

And, lastly, here’s some advice. To respond to SEC or PCAOB investigations into accounting/auditing issues, find an attorney with real accounting chops. Isolating issues early, doing a deep dive on substantive topics, and determining how to approach the investigation at the outset will almost certainly pay huge dividends over time.