PCAOB Staff Considerations on Recommending the Identification of Issuers and/or Broker-Dealers in Settled Enforcement Orders*

When PCAOB enforcement staff present a potential settlement to the Board, the staff recommend whether the proposed settled order should identify any issuers and/or broker-dealers related to the action. Enforcement staff consider the facts and circumstances of each matter while balancing the goal of transparency with fundamental fairness to issuers and broker-dealers. Staff initially focus on the nature of any violations at issue, including whether they relate to alleged deficiencies in the performance of an audit. In matters that do not involve alleged deficiencies in the performance of an audit, staff generally recommend that the settled order not identify any related issuers and/or broker-dealers.

In matters that involve alleged deficiencies in the performance of an audit, staff generally recommend that the settled order identify any issuers or broker-dealers in the following circumstances:

  • The issuer or broker-dealer has disclosed or admitted previously to concerns regarding the financial statements or internal controls over financial reporting that are relevant to the matter;
  • A separate regulator has taken—or plans to take—public action against the issuer or broker-dealer or its directors or officers related to the core facts relevant to the matter; or
  • The issuer or broker-dealer or its directors and/or officers have been found in a public proceeding to have engaged in misconduct relevant to the matter.

Staff may also consider other facts and circumstances bearing on whether the order should identify any issuers and/or broker-dealers related to the action.

* The considerations outlined do not establish Board rules or Board policy. The Board retains full discretion to determine whether to approve any particular settlement recommendation presented to it.