Investigation Shows SEC Prone to Avoiding Big Four Action
SEC insiders indicate that the large firms remain "difficult targets" for the SEC. Small public accounting firms often lack the legal resources to fight any SEC action, therefore "winning" a case is perceived to be much easier against a small firm than a large one.
A Washington Post examination of the SEC enforcement record shows that in the fiscal year that ended September 30, the SEC brought enforcement actions against only two auditors that it identified were employed by the Big Five firms. In contrast, fifteen individual auditors from smaller firms were the subjects of SEC enforcement actions.
"If it's a small [accounting firm], they slam the hell out of them. If it's a big accounting firm, it's a different equation," a member of the SEC staff told The Washington Post.
In some instances, the SEC sought to take action against a firm for violations, but failed to discipline or hold accountable any individual within the firm for their actions.
"It isn't easy to take on those big boys, but one has to do it because otherwise I think the big boys are encouraged to feel that they can push the SEC around," former SEC commissioner Bevis Longstreth said.