Audit Committee Insights | January 2026

Happy New Year! We hope you enjoyed (survived?) the holidays. The start of a new year often conjures thoughts of revival, renewal, resolutions and, often, decluttering. Whatever your intention for 2026 – eat healthier, exercise more, save money, spend more time with family, retire, travel, volunteer – we wish you strong resolve and success! We’re keeping abreast of what resolutions policy makers have set in Washington to keep audit committees up to date. Read on!

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Here are 26 considerations for audit committees in 2026: 

1. Review and update the audit committee charter.
2. Set a proactive calendar that maps to the audit committee charter responsibilities.
3. Review the audit committee succession plan and consider actions needed in 2026.
4. Plan when your external auditor assessment will be conducted in 2026.
5. Commit to enhancing the audit committee report in the proxy statement in 2026.
6. Invite experts to audit committee meetings throughout 2026.
7. Ensure actions from the prior year audit committee self-assessment are in process.
8. Review the external audit partner rotation schedule and consider actions needed in 2026.
9. Schedule tabletop exercises (cyber/AI/transactions) for 2026.
10. Schedule an in-person one-on-one with a new (or new-to-you) C-suite executive.
11. Stop by the audit room and say hello to the external audit team.
12. Meet with the finance and internal audit early career professionals.
13. Unsubscribe from email newsletters that are not helpful (obviously not this one…).
14. Ask a peer for a recommendation for a newsletter or podcast.
15. Have a hard conversation with someone with whom you are having difficulty.
16. Choose one thing to stop doing that isn’t benefiting you.
17. Learn how to do something new using AI.
18. Encourage your company to streamline the 10-K and “root disclosures in the concept of financial materiality.”
19. Invite a mid-career professional to a networking event of an organization with which you are involved.
20. Schedule extra time on your next business trip to enjoy the city you are visiting.
21. Go deeper with a volunteer organization you care about.
22. Rotate off a commitment you no longer have time for or don’t enjoy.
23. Say “yes” to more than one board.
24. Say “no” to too many boards.
25. Change boards.
26. Praise someone when they do a good job.

Audit Committee Priorities for 2026 

Using the year-end and new year audit committee resources from EY’s Center for Board Matters, 2026 audit committee priorities: navigating complexity and change; PwC’s Governance Insights Center, Approaching the 2025 year-end financial reporting season, Your guide to year-end reporting developments, and BDO’s Corporate Governance Center’s Audit Committee Priorities for 2026, here is an action plan for 2026:

1. Map 2026 risks to scenarios (economic, tariff/trade, cyber/AI, supply chain) and agree on triggers, decision rights, and escalation paths. 
2. Update cyber incident response and AI governance (policy, model risk controls, change management, monitoring); set AC reporting metrics (e.g., time to detect, model drift indicators). 
3. Be aware of leading SEC comment letter themes and focus on non-GAAP measures, MD&A clarity, segment reporting, and revenue recognition; ensure management has remediation plans and disclosure controls aligned with these trends.
4. Be aware of the top internal control issues in adverse ICFR management assessments and focus on accounting personnel resources, segregation of duties, information technology, inadequate disclosure controls, and non-routine transactions.
5. Assess Pillar Two/global minimum tax impacts (measurement, disclosures, controls) and confirm readiness in tax and consolidation processes. 
6. Challenge impairment and going concern judgments amid interest rate and liquidity dynamics; review refinancing plans and covenant sensitivities.
7. Refresh fraud risk assessment and investigations protocol, including data driven detection and hotline triage; confirm auditor’s use of data analytics and how AC will get insight. 
8. Clarify AI in the audit and finance functions: understand where the external auditor uses tech/AI, the benefits/limits, and how management’s AI controls interface with audit procedures. 
9. Tighten cyber reporting to the board—define thresholds for “material incident,” board ready dashboards, and linkage to enterprise resilience KPIs. 
10. Revisit AC charter, skills, and education plan—ensure technology fluency (AI, data governance), transaction oversight (M&A comeback), and disclosure expertise are covered. 

PCAOB Oversight Among Top Priorities for SEC’s Chief Accountant 

SEC Chief Accountant Kurt Hohl described his priorities during a fireside chat with the CAQ at the 2025 AICPA Conference on Current SEC and PCAOB Developments in December.

In addition to being responsive to emerging issues and focusing on FASB oversight, Hohl described oversight of the PCAOB as a top priority.

“Audit firms have made significant efforts to improve audit quality in recent years. However, the PCAOB and audit firms are also affected by innovation and the changing business environment that comes with it. As the new PCAOB Board gets up and running, will encourage the Board to evaluate how the changing business environment necessitates changes in the PCAOB’s standard-setting agenda and oversight processes.

For example, we will encourage the PCAOB to take a fresh look at its inspections process, particularly in light of new quality control standards, and to consider whether inspection reports are providing meaningful information to stakeholders. The PCAOB could consider whether shifting its inspection process towards the review of a firm’s system of quality management, corroborated by engagement-level reviews, provides more relevant information about audit quality. We also support a more transparent and responsive audit standard-setting process.

We believe the PCAOB should consider additional transparency in its standard-setting process, for example, adopting an agenda consultation process, similar to the process utilized by the FASB.”

Click through to read Hohl’s full remarks.

ICYMI: CAQ Public Policy Technical Alert (PPTA), December 2025 

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 December 2025 Alert included these featured articles.

PCAOB Approves 2026 Budget 

The PCAOB approved its fiscal year 2026 budget at an open meeting on December 19, 2025. Subject to approval by the SEC, the PCAOB’s budget reflects the resources expected to be necessary for the organization to carry out its statutorily mandated responsibilities under the Sarbanes-Oxley Act. For 2026, the budget is $362.1 million, which is a nearly 10% reduction from fiscal year 2025’s budget.

FASB Issues New Standard to Improve Interim Reporting 

The FASB issued an ASU that improves the navigability of the required interim reporting disclosures and clarifies when that guidance is applicable. It also provides additional guidance on what disclosures should be provided in interim reporting periods. The amendments in the ASU:

• Clarify that the guidance in Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP
• Create a comprehensive list in FASB Accounting Standards Codification Topic 270 of interim disclosures that are required in interim financial statements and notes in accordance with GAAP
• Incorporate a disclosure principle, which is modeled after previous SEC guidance, that requires entities to disclose events and changes that occur after the end of the most recent fiscal year that have a material impact on the entity
• Improve guidance about information included in and the format of interim financial statements.

The ASU, including transition and effective date information, is available at www.fasb.org.

What are Americans’ New Year’s resolutions for 2026? Adults under 30 resolve to be happy. You should too.

A new YouGov survey explored Americans’ New Year’s resolutions. Adults under 45 are about twice as likely as older Americans to say they will make a New Year’s resolution (43% vs. 21%). Adults under 30 are more likely than older Americans to resolve to be happy and spend more time with family.

The most common New Year’s resolution for 2026 — out of 25 included in the survey — is exercising more. Other popular resolutions include being happy (23%), eating healthier (22%), saving more money (21%), and improving physical health (21%).

Among people who are planning to make a resolution for 2026, 39% say it is very likely they will keep their resolution throughout 2026 and 7% say it’s not very (5%) or not at all (2%) likely.

If you made a resolution for 2026, good luck and stick with it!

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.