From www.sciencedirect.com: (US context) The study examines the impact of political partisanship on the Securities and Exchange Commission’s investigations and Accounting and Auditing Enforcement Releases regarding financial misconduct.

It finds that firms politically misaligned with the SEC are more likely to be investigated, while misaligned firms facing AAERs receive harsher penalties, although their likelihood of receiving an AAER remains unaffected by political misalignment.

The research highlights potential misallocation of enforcement resources due to partisanship, suggesting that the SEC may focus excessively on misaligned firms despite no greater propensity for misconduct among them.