I don't have children myself but my sister has 2 daughters age 10 and 12. And I was horrified to find out recently that she and her husband spanks both girls when they think the daughters misbehaved too much. And not only the slaps are hard, they pull down their pants and panties for the spanking. I and my sister was spanked but only until the age of about 9. Then our parents stopped.
Although I can understand that a couple of swats on clothed buttocks can be defended I think it is horrible to spank a 12 year old on her naked buttocks.

Is there anything I can do to help these girls and make my sister and her husband stop spanking them?

Also, how accepted is spanking today and to what extent?

This is the decision of the Supreme Court of Canada regarding punishment by spanking the children. You are probably in the USA so don't know what the law is there; spanking is a criminal offence in Denmark, but for the most part (and although these issues are reported to the CPA, apparently they don't stick as an offence).

The Supreme Court of Canada decided that section 43 of the Criminal Code is constitutional; it found that section 43 does not violate a child's rights to security of the person and equality, and is not cruel and unusual punishment. More specifically, the Supreme Court held that section 43 ensures that the criminal law applies to any use of force that harms a child, but does not apply where the use of force is part of a genuine effort to educate the child, poses no reasonable risk of harm that is more than transitory and trifling, and is reasonable under the circumstances.

So, to answer your question, nothing much you can do unless you want very bad feelings in your family circle. Suggest you discuss the issue with your sister and her husband.

Perhaps mind your own business, this is a highly personal issue.

Difficult topic! So many people grew up being spanked, even with their pants down, and turned out fine. Others didn't. Some even developed sexual fantasy lives that revolved around S & M.
Therefore it isn't easy to draw conclusions about spanking all by itself. In the US, this depends on the whole picture as deemed by local social services, if reported as abuse, and if they even investigate. So many factors - how well the child does in school, what the family is like as a whole, who is reporting, who the social worker is. My brother got in trouble for yanking his teen daughter out of the tub when they were all late for church. (I think he had to go to anger management.)

My siblings and I (in our 60s and 70s) were spanked some (or told to go to our rooms) until we were old enough to get allowances taken away and permission to go places denied. That's the usual process.

If I were you, and the girls seem well adjusted with friends and school, I'd stay out of it. I have to admit I might let out just one YIKES aren't they a bit old to have their panties pulled down?

I agree with the earlier posts. But, (or butt?) it depends on who is doing the spanking and their mental status (not sure if mental status is exactly what I mean- maybe how well adjusted they are- do they have anger issues etc?).
Does the parent increase the severity of the "whippings" because the child's behavior hasn't yet changed? Where might that end up? As joy said- requiring that the child be naked is going too far. It doesn't affect the level of pain from the swat, it's bordering on mental cruelty.
I think that removing a 12 yr old's clothing in front of anyone else (even in front of the other parent) crosses the line and I would at least object to it being done in my presence and would absolutely outlaw it in my home if they were visiting.
And if this is what they do when you are around, what goes on when nobody else is looking?
Aside from taking a stand on what is done in your presence, you don't have many options.

I feel so sorry for them! Although they are not really forced to be naked. Their panties are pulled down while they are already lying over their knees but still this must be terrible mortifying for a girl. As far as I can see the girls are doing quite well both mentally and socially and they are doing good in school. But spanking is wrong and spanking girls bare behinds must be unnecssearily cruel. And my heart hurt so much when I saw them lying there howling their head off the stinging. Is it really nothing I can do?

Talk to your sister alone. Take her to lunch or tell her you need her help shopping for something, or getting ready for Thanksgiving. Find the right moment and bring it up gently. Maybe say you heard a story of someone who got in trouble (like my brother did - feel free to use that one). If one of the girls lets it out around school, it could get to a teacher, and it could blossom from there. Suggest to her the usual punishments kids get when they reach a certain age. Denial of going places is by far the best.

Just don't be too alarmist or she will go into defiant mode. It isn't going to be easy. If the talk fails, hug her and say you love her and let it drop. She may think it over when you aren't around.

I think spanking is only acceptable until the child is at the age of 7. The spanking only humiliates a teenager now as they are exposed to sexual contents these days, they would know how spanking is used for other than punishment. Anyway, I think you should talk with your sister and tell her how you feel about this. Tell her that her children have already been taught their lesson. As they grow and mature, their punishments should mature also. Instead of spanking, get them to do chores, take away their phone for 24 hours, ground them... Spanking is very old fashioned and shouldn't be used for so long. It can bother the child as they grow older and cause them to dislike their parents for treating them as if they were small children. I've already seen another post like this and This woman's daughter who is now 19 won't even visit her anymore because the spankings continued until she was 15. Your sister and her husband should stop now.

I think it's a sad commentary when you have to spank a young adult and cannot think of a better more effective strategy. Or even look for one.