PCAOB targets audit risks with five new specialist enforcement units

The US Public Company Accounting Oversight Board (PCAOB) has reorganised its Division of Enforcement and Investigations into five specialist units.

The new structure includes a strategic risk unit, which will investigate audit failures associated with fraud indicators and material accounting issues.

A superintelligence unit will assess emerging risks arising from the use of superintelligence in audits of public companies and support its appropriate application.

The global network firm unit will handle cases involving the largest accounting firms and other complex matters.

A separate non-affiliated firm unit will investigate smaller firms registered with the PCAOB.

The international unit will pursue cases involving audit firms outside the US, drawing on cross-border expertise and cooperation with regulators in other jurisdictions.

Each unit will be led by a chief and staffed by lawyers, accountants and other personnel.

The PCAOB said the arrangement is intended to align specialist expertise with its focus on investor protection, audit integrity and confidence in the US capital markets.

Under the revised structure, the PCAOB will work particularly closely with the SEC’s Financial Reporting and Accounting Unit within its Enforcement Division and the Office of the Chief Accountant.

The PCAOB said its enforcement division will continue to provide the SEC with regular updates on its investigations and coordinate with the regulator where appropriate.

PCAOB chairman Demetrios Logothetis said: “This reorganisation will strengthen our Enforcement division and better equip the PCAOB to investigate potential audit misconduct and hold bad actors accountable.

“An effective enforcement division is central to our efforts to get the PCAOB back to focusing on the basics of its investor-protection mission.”

Last month, PCAOB revised standard-setting and rule-making priorities based on stakeholder feedback.