The Public Company Accounting Oversight Board’s (PCAOB) enforcement staff said that it will no longer routinely require respondents in disciplinary settlements to agree not to publicly deny findings contained in settled orders.
In a July 31, 2026, statement posted on its website, the PCAOB staff said this change aligns its enforcement practice with that of the Securities and Exchange Commission (SEC), which oversees the board, regarding public denials of findings in settled disciplinary orders.
Under the revised approach, the enforcement staff will no longer routinely condition a recommendation that the PCAOB accept a settlement offer on a respondent’s agreement not to publicly deny findings in a settled disciplinary order.
The staff also said it will not recommend enforcement of existing no-deny provisions already included in settled disciplinary orders or offers of settlement. According to the statement, if a respondent breaches an existing no-deny provision, enforcement staff will not recommend that the board take action, including vacating a settled disciplinary order because of the breach.
The statement notes that the enforcement staff already does not routinely recommend that settling respondents admit findings.
For example, in a June 2025 order against Deloitte Netherlands for cheating by staff on internal training tests, it uses this language: “In anticipation of the institution of these proceedings, and pursuant to PCAOB Rule 5205, Respondent has submitted an Offer of Settlement (the “Offer”) that the Board has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Board, or to which the Board is a party, and without admitting or denying the findings contained herein, except as to the Board’s jurisdiction over Respondent and the subject matter of this proceeding, which is admitted, Respondent consents to the entry of this Order as set forth below.”
The July 31 statement clarified that the change does not affect staff practices related to admissions in settlements. It also does not alter the board’s discretion to settle cases with respondents who decline to admit findings or liability, or its authority to require admissions as part of a settlement.
The statement included a note that the considerations outlined by the enforcement staff do not establish PCAOB rules or board policy. The PCAOB staff noted that the board retains full discretion to determine whether to approve any settlement recommendation presented to it.
Richard Chambers, former chief executive officer of the Institute of Internal Auditors, said he understands the rationale for the PCAOB enforcement staff’s change.
“Firms and individuals sometimes settle enforcement matters for practical reasons, and a settlement without an admission of wrongdoing should not automatically be treated as a confession,” said Chambers, who is today an executive adviser at Optro.
However, he said there may potentially be unintended consequences.
“PCAOB disciplinary orders serve an important investor-protection purpose. They tell investors, audit committees and the profession what the PCAOB believes went wrong. We could now see a firm accept sanctions and pay a substantial penalty, then publicly dispute the findings underlying that settlement,” Chambers explained. “That could create confusion about what actually happened.”
He believes that the change may require greater due diligence for audit committees.
“If an audit firm disputes findings after settling, directors should ask what specifically the firm disputes, why it settled, what deficiencies it acknowledges, and what remediation occurred,” Chambers added. “The credibility of PCAOB enforcement ultimately depends on investors and audit committees having confidence that its disciplinary orders provide meaningful information about audit quality.”
The PCAOB enforcement staff’s statement comes as officials at both regulators have said that they will coordinate more closely on enforcement matters, especially as both regulators have the authority to bring enforcement actions against violators. Moreover, both, especially the PCAOB, have been operating under tighter budgets recently.
In the meantime, this development follows another quiet revision by the PCAOB enforcement staff on July 10 regarding identification of issuers and broker-dealers in settled disciplinary orders against auditors. This statement narrows the circumstances under which the enforcement division will recommend identifying issuers in matters involving alleged audit performance deficiencies.
Editor’s note: This article was updated to include a comment by Richard Chambers
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