The Securities and Exchange Commission is probing the nation’s four biggest accounting firms to determine whether or not they violated the auditor independence rules, The Wall Street Journal reported last week.

The Big Four firms under investigation are Deloitte Touche Tohmatsu Limited, Ernst & Young LLP, PricewaterhouseCoopers LLC and KPMG International Limited. These major accounting firms provide audit services to conduct independent financial reviews of more than half of all public companies with $75 million market value, shown by Audit Analytics’ data.

However, regulators of the agency are investigating a violation of auditor independence rules because the four firms’ “non-audit services” and consulting may conflict with their ability to review the financial statements of the public companies impartially. The accuracy of financial statements is crucial because it protects investors and shareholders from fraud and accounting improprieties of a public company.

“You will see that we will have a firm commitment moving forward to continue to target deficient auditing by auditors, auditor independence cases, cases around earnings management,” SEC Division of Enforcement Director Gurbir Grewal said at a national auditors’ conference in December.

Last year, the SEC’s Miami office sent letters to the Big Four and smaller firms,seeking information about client work that could make auditors violate rules of independence from clients whose finances they review; sources told The Wall Street Journal.

The SEC recently requested audit firms to disclose the instances of providing consulting, tax advice and lobbying to clients. The SEC also requested information for any cases in which audit firms have secured contracts that repay them for losses from their work and made contingent fees for a specific outcome.

The SEC has conducted multiple investigations into the Big Four since 2014, all of which have paid fines to settle the agency’s investigations.

For example, Ernst & Young settled an SEC investigation into allegations of violating independence rules. However, in 2014, the firm only paid $4 million without admittance of guilt after the SEC charged them for lobbying congressional staff on behalf of two audit clients, according to the agency’s website.

That same year, KPMG paid $8.2 million to settle charges of providing nonaudit services such as bookkeeping for affiliates of clients they were auditing and some KPMG personnel owning stocks in affiliates of companies that were their audit clients. In addition, Deloitte & Touche LLP paid $1.1 million to settle an enforcement action claiming violation of auditor independence rules.

PwC also paid $8 million to settle charges of auditing its own project management system in 2019.

Spokespeoplefor the SEC, KPMG, PwC, Deloitte and Ernst & Young have declined requests to comment from The Wall Street Journal or The Hill.