Executive Summary
- What’s new: The SEC announced the creation of a dedicated Financial Reporting and
Accounting Unit within its Division of Enforcement. The unit consolidates nationwide
resources and expertise previously dispersed across regional offices to investigate and
bring enforcement actions related to public company accounting and financial reporting. - Why it matters: Accounting and financial reporting cases are central to the SEC’s enforcement mission and among the most complex cases the agency pursues. The creation of a dedicated unit with consolidated resources and specialized expertise signals an intent to accelerate investigations and enforcement actions focused on public company accounting, financial reporting and disclosures, and internal controls over these functions.
- What to do next: Companies will want to ensure they have robust internal accounting and disclosure controls — including policies and procedures governing non-GAAP and guidance reporting that are not subject to audit testing — and assess materiality from both quantitative and qualitative perspectives.
On August 5, 2026, the Securities and Exchange Commission (SEC) announced the formation of a new Financial Reporting and Accounting Unit within its Division of Enforcement. The unit represents a significant organizational shift: The SEC is consolidating nationwide resources and specialized expertise to investigate issues related to accounting and financial reporting in public companies, general accounting and auditing misconduct.
For further information, please contact:
Anita B. Bandy, Partner, Skadden
anita.bandy@skadden.com
