It’s been a frigid start to the year here in Washington, DC with plenty of snow and ice that will hopefully be melting soon. The cold hasn’t stopped regulators and other stakeholders so we’re still brrringing you the latest regulatory updates and resources. Take some time to read these insights by the fireplace or between your favorite Olympic games this winter season (Go Team USA!). Read on to learn what’s new.
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In This Issue:
- Focused on Materiality and Scaling Disclosure – Remarks from SEC Chairman Atkins and Commissioner Uyeda
- Demetrios (Jim) Logothetis Sworn In as New PCAOB Board Chairman
- CAQ Resource Highlight: Role of the Auditor in Digital Assets: Present and Future
- Demands on the Rise – How the Audit Committee Can Stay Effective
- CAQ’s Audit Committee Council Spotlight: Sara Lewis, Audit Committee Chair Weyerhaeuser
- ICYMI: CAQ Public Policy Technical Alert (PPTA), January 2026
- Alex Honnold: Finding Joy Beyond Fear
Focused on Materiality and Scaling Disclosure – Remarks from SEC Chairman Atkins and Commissioner Uyeda
In recent statements, SEC Chairman Atkins and Commissioner Uyeda have emphasized the importance of materiality and scaling when considering SEC disclosure requirements to protect investors and enable capital formation.
Chairman Atkins has said that, in its current form, Regulation S-K “elicits both material and a plethora of undisputably immaterial information” and that “he Commission’s disclosure regime should enable a reasonable investor to separate the wheat from the chaff when reviewing periodic reports and proxy statements.” He has instructed the Division of Corporation Finance to perform a comprehensive review of these requirements and has solicited public comment, with comments due no later than April 13, 2026. You can submit your views here.
Commissioner Uyeda suggested potential changes to scale disclosure requirements in a way that promotes capital formation. As an example, he cited changes to the Emerging Growth Company and Smaller Reporting Company definitions as a way to achieve promotion of capital formation. He also shared similar views to Chairman Atkins on the importance of financial materiality in reporting.
Keep these views in mind as you review your company’s financials and prepare for your next audit committee meeting. Sometimes less is more.
Demetrios (Jim) Logothetis Sworn In as New PCAOB Board Chairman
The SEC announced four new PCAOB Board Members; the Chairman and Board Members Calabria and Laughton were sworn in on February 10, 2026.
- Demetrios (Jim) Logothetis, Chairman (CPA) – Chairman Logothetis previously served on the board of The Republic Bank of Chicago, where he chaired the audit committee, and on the advisory council of CrossCountry Consulting, a privately owned consultancy firm. In 2019, he retired from Ernst and Young after 40 years with the firm, during which time he served as the lead audit partner for several of EY’s largest clients. His current term expires on October 24, 2030.
- Mark Calabria – Board Member Calabria was an Associate Director and Chief Statistician with the White House Office of Management and Budget and a Senior Advisor to the Office of the Director of the Consumer Financial Protection Bureau. His prior service includes the Federal Housing Finance Agency, the U.S. Department of Housing and Urban Development, and the National Association of Realtors. His current term expires on October 24, 2027.
- Kyle Hauptman – Mr. Hauptman is currently the Chairman of the National Credit Union Administration (NCUA), a position he was elevated to in January 2025. He previously served on the Senate Banking Committee as Economic Policy Counselor to a senator. He has also held positions at the American Enterprise Institute, Jefferies and Co., and Lehman Brothers. He will serve a term ending on October 24, 2029.
- Steve Laughton – Board Member Laughton previously served as Board Counsel to former Board Member Christina Ho, advising her on all matters that came before the Board. Before joining the PCAOB in 2022, Board Member Laughton spent more than 30 years with the U.S. Department of the Treasury. His current term expires on October 24, 2026.
George Botic (CPA) will continue his service as a Board member. His current term expires on October 24, 2028.
The CAQ looks forward to working with the PCAOB as they carry out their work.
Do you have a perspective on what the PCAOB should focus on in 2026? Let us know your thoughts. Your perspectives can help inform the CAQ’s work to champion the public’s interest in capital markets.
CAQ Resource Highlight: Role of the Auditor in Digital Assets: Present and Future
The CAQ’s new resource, The Role of the Auditor in Digital Assets: Present and Future, provides an overview of the current state of the digital asset ecosystem and explores how public company auditors are adapting to meet stakeholder needs.
As the digital asset landscape evolves and companies introduce digital asset-related activity into their business, audit committees play an important role. The audit committee has a responsibility to ensure that the company has a robust digital asset strategy, that the committee has the appropriate expertise to understand this activity, and to oversee the overall strategy and risk management around the new digital asset-related activity.
Demands on the Rise – How the Audit Committee Can Stay Effective
As audit committees face expanding responsibilities and heightened expectations, a recent resource from Tapestry Networks, with the support of EY, offers practical guidance on maintaining effectiveness. Key takeaways include:
- Foundations of a High‑Performing Audit Committee
- Committee composition matters – Investors are calling for more visible expertise, especially in technology, but many audit chairs cautioned against overspecialization.
- People processes sustain performance – Thoughtful onboarding and succession plans are worth the investment.
- Clear mandates and structure prevent overload – Clarify how responsibilities are divided between the audit and risk committees.
- Good Practices for Effective Meetings
- Planning and prioritization help control overloaded agendas – Leading chairs are rethinking meeting flows. As one explained, “Getting through the agenda is a challenge, so I flipped it so that internal audit is top of the agenda.” A clear, yearlong plan helps committees map the year’s priorities and create room for substantive discussions.
- Strong committee communication starts with the chair – Effective oversight depends on the quality of conversation with members who speak openly, challenge constructively, and stay engaged. For passive committee members, it’s best to address directly – privately and constructively – to reset expectations. “I had one-on-one conversations with members and asked them directly to reengage, to ask questions,” said one chair. “And I told them, if they don’t, I’ll ask them questions.”
- Private sessions are a strategic tool – Executive sessions are some of the most valuable moments in the meeting cycle, creating space for open conversation, early issue-spotting, and alignment on priorities. For many committees, the external auditor is a regular presence, even in private sessions. Some members advised caution: “There are some sessions where it’s fine for the external auditor to be there, but there is a fine line.” EY participants stressed being clear about when and why the auditor is excluded: “It’s important to communicate the reason.”
- Managing Key Relationships
- Company-wide relationships shape oversight effectiveness – The audit chair–CFO relationship needs to be anchored in trust and candor. “You shouldn’t be friends and vacation together, but you should have a trustful relationship that is strong enough to be confrontational at times.” Internal audit provides a lens into the organization’s risks. Chairs described maintaining continuous, informal communication to stay attuned to early signals. The corporate secretary is a strategic partner. “When you have a strong corporate secretary, it seems like things invisibly flow smoothly,” one member said. “In addition to the CFO and head of internal audit, I engage meaningfully with those in charge of risk management, accounting, legal, compliance, and sustainability,” said a member. “They provide a view of the business that is essential for timely oversight.”
- The external auditor relationship is critical – The relationship works best when both sides commit to candor. “I see the audit committee as an ally to the external auditor,” one chair said. “Trust and the ability to straight talk with the audit committee are crucial.” With regards to auditor transitions, apply rigor to the transition itself. One chair highlighted a practice that worked well: “During the changeover, the new auditor shadowed the outgoing firm for a full year, and we ran a disciplined partner-selection process.”
- Staying Curious – The audit committee is a powerful place to explore and learn – Adopt a growth mindset to board learning and make continuous learning part of how the committee operates. “We regularly do special meetings,” one member said. “We’re currently focusing on cybersecurity and the role of AI for two to four sessions.”
CAQ’s Audit Committee Council Spotlight: Sara Grootwassink Lewis, Audit Committee Chair Weyerhaeuser
We sat down with Sara Grootwassink Lewis, Member of the CAQ’s Audit Committee Council, to shed light on her career and journey to the audit committee.
How did you get started in accounting? What was your first and last job?
I started out in banking in Chicago as a construction lender. My last job was as a Chief Financial Officer of one of the oldest publicly traded real estate companies. The accounting skill set was fundamental to my success. I often joke that I can read a financial statement easier than I can read a book, but it’s somewhat true. It is a skill that will serve you throughout any career in business. Accounting should never drive a business decision, but it’s important to know how decisions will play out in the financial statements.
What was the first corporate board that you joined? How did you get on that board?
When I was a Chief Financial Officer, 22 years ago, my external audit partner was taking another company in Washington, DC through an IPO. He recommended me to the CEO for the board and audit committee of CapitalSource. I served on that board for 10 years, until we merged into another bank. It was a phenomenal experience.
What do you enjoy most about serving on the audit committee? How is it different from other board committees?
Through more than 2 decades of service on 11 corporate boards, including 8 public companies, I have chaired every committee, including as chair of five audit committees and as presiding director. I have enjoyed every committee I have chaired. But the audit committee is probably my first love. You need a broad understanding of the company’s strategy, as well as the inherent risks and opportunities.
I also find it very helpful to have an audit committee member with a background other than accounting or finance. They often ask the best questions – something the rest of us would not have asked because we assumed we knew the answer.
What else do you do outside of board service?
My husband and I are very fortunate to split our time between Scottsdale, AZ and Hawaii. I enjoy golf, hot yoga, reading, travel, and spending time with friends and family, including my two wonderful stepchildren.
My philanthropic work revolves around public policy and often, it’s impact on business. For many years, I have served on the Brookings Institution and the US Chamber of Commerce Center for Capital Markets Competitiveness leadership board, as well as the Center for Audit Quality Audit Committee Council.
What trends or risks do you think audit committees will need to focus on in the next few years?
Artificial intelligence is a great opportunity and risk over the next several years. The impact of AI on a company’s strategy, as well as the use of AI within a company will have a tremendous impact. The audit committee’s role is to oversee risks related to financial reporting, internal controls, data security and compliance.
Also increasingly important is capital allocation and the use of leverage, both by companies and by governments. A healthy, sustainable balance sheet, at companies and in governments, is increasingly rare. We will need to keep our eyes on our own balance sheets, as well as the impact from the leverage others employ can have on our strategy and outcomes.
In addition to Sara’s role as audit committee chair of Weyerhaeuser, Sara serves as an audit committee member of Freeport-McMoRan Inc., and is on the board of Healthpeak Properties, Inc. She joined the CAQ’s Audit Committee Council in December of 2020. Sara was a panelist on the CAQ’s recent webinar related to the External Auditor Assessment.
ICYMI: CAQ Public Policy Technical Alert (PPTA), January 2026
Each month, the PPTA highlights and examines the regulatory, standard-setting, legislative, and broader financial reporting developments impacting the public company audit profession. The CAQ’s January 2026 Alert included these featured articles.
SEC Approves 2026 PCAOB Budget and Accounting Support Fee
The SEC approved the 2026 budget for the PCAOB and the related accounting support fee. The 2026 PCAOB budget totals $362.1 million. The 2026 budget reflects a 9.4% ($37.6 million) decrease from the prior year. The accounting support fee totals $306.0 million, an 18.4% ($68.9 million) decrease from the prior year, of which $280.3 million will be assessed on public company issuers and $25.7 million will be assessed on brokers and dealers.
SEC Seeks Candidates for Membership on the Investor Advisory Committee
The SEC announced that it is seeking candidates for appointment as members of the SEC’s Investor Advisory Committee. Candidates will be considered for open at-large membership positions on the committee, as well as for a position as the member who is representative of the interests of senior citizens. The deadline for submission of a letter of interest is Feb. 23, 2026.
PCAOB Announces Advisory Group Members
The PCAOB announced the appointment of members of its two advisory groups. The appointees join continuing members of the Investor Advisory Group and the Standards and Emerging Issues Advisory Group. Advisory group members are generally appointed for two-year terms.
Alex Honnold: Finding Joy Beyond Fear
We like to finish this newsletter on a high note and what better way to do that than to highlight climber Alex Honnold, who recently climbed Taipei 101 in Taiwan – 508 meters or 1,667 feet. The climb was live-streamed on Netflix. Honnold of Free Solo fame performed this feat without any assistance. No ropes or harness. Nothing. The married father-of-two completed this climb in an impressive 90 minutes, and not surprisingly (if you have been following his amazing career) he seemed to have no fear at all. In interviews, Alex has emphasized the importance of training and preparation which in turn reduces risk. While unlikely that any of us will be climbing skyscrapers like Alex, we can learn the importance of preparation, understanding risk, and accepting fear. Read more about his climb here.
Questions and comments about Audit Committee Insights can be addressed to Vanessa Teitelbaum, Senior Director, Professional Practice (vteitelbaum@thecaq.org).
This newsletter is intended as general information and should not be relied upon as being definitive or all-inclusive. The CAQ encourages readers to refer to applicable rules, standards, guidance, and other resources in their entirety. All entities should carefully evaluate which requirements apply to their respective organizations.