Happy May! We’re five months into the year and things are heating up, from a temperature perspective but also from a regulatory perspective. Regulators are collecting comments from stakeholders, engaging with advisory groups, and proposing new rules. We’ll share our insights along with highlighting informational resources in this latest edition of Audit Committee Insights. Read on to learn what’s new.
We welcome input; please let us know what you think. Was this email forwarded to you by a colleague? Subscribe here so that you never miss an update from the CAQ.
In This Issue:
- We Need Your Perspectives: Audit Committee Practices Survey
- SEC Proposed Rule: Semiannual Reporting
- Insights from PCAOB IAG and SEIAG Meetings
- ACC Comment Letter: PCAOB Strategic Priorities
- AFC Resource Highlight: Role of the Internal Auditor – Fraud Risk
- Strengthening AI Governance
- Enterprise Risk Management: Continuous Assessment
- ICYMI: CAQ Public Policy Technical Alert (PPTA), April 2026
- Why We Observe Memorial Day
We Need Your Perspectives: Audit Committee Practices Survey
STOP. Before you consume these valuable insights, can you give us 10 minutes of your time to inform the audit committee’s work?
Your perspectives will help identify evolving oversight priorities and leading practices. This year’s survey also expands to artificial intelligence (AI) oversight, reflecting the growing importance of AI in the boardroom.
If you’re currently an audit committee member, the CAQ and Deloitte’s Center for Board Effectiveness want to hear from you in this year’s Audit Committee Practices Survey.
As a bonus, the first 200 respondents will have the chance to direct a charitable contribution of $100 to one of three non-profits.
SEC Proposed Rule: Semiannual Reporting
The SEC has proposed amendments that would permit public companies to optionally shift from quarterly to semiannual reporting, representing a potential change to the cadence of interim financial reporting. Under the proposed rule, public companies could elect to file one semiannual report and one annual report per year in lieu of the traditional three Form 10-Qs and one annual Form 10-K. Here are some initial considerations from PwC’s recent overview of semiannual reporting:
- Beyond SEC requirements, what other obligations (e.g. debt covenants) may necessitate quarterly reporting? More broadly, how does the reporting cadence align with the company’s future strategy?
- How might investors and other key stakeholders view a move away from quarterly financial statements that are reviewed by an auditor?
- What are peers and competitors considering in terms of reporting cadence, and how might that influence expectations?
- Could reduced frequency of financial reporting create an information vacuum for the market, and if so, how might that impact stock price?
- What are the benefits to the company of transitioning to semiannual reporting?
Comments can be submitted here and are due by July 6, 2026.
Insights from PCAOB IAG and SEIAG Meetings
The PCAOB held meetings of their two advisory groups, the Investor Advisory Group (IAG) and the Standards and Emerging Issues Advisory Group (SEIAG), on April 29th and May 6th, respectively. Chair Logothetis and his fellow board members attended both meetings and shared insights into the PCAOB’s future plans.
- The PCAOB is forming a new inspections task force tasked with integrating AI into the inspection process – a call for nominations is planned in the coming weeks.
- The PCAOB is aiming to release an agenda consultation in June.
- Board Member Calabria announced that the PCAOB is working to finalize the broker dealer inspection program by the end of 2026.
- Chair Logothetis plans to spend significant time traveling and engaging in-person with audit committees.
ACC Comments Letter: PCAOB Strategic Priorities
The CAQ’s Audit Committee Council (ACC), an independent advisory group, submitted a comment letter in response to the PCAOB’s request for comment on its strategic priorities. Grounded in the PCAOB’s investor protection mission with the goal of enhancing audit quality, the ACC shared these top three recommendations:
- Strengthen the PCAOB inspections program – The PCAOB should prioritize improvements to the focus, consistency, and timeliness of inspections. A more risk-based and quality control-focused approach would provide more meaningful insights to audit committees and reduce unnecessary pressure on audit engagement teams. “Enhancements to focus, consistency, and timeliness would meaningfully improve usefulness to stakeholders.”
- Promote regulatory efficiency and durable standards – New or revised standards need to deliver clear benefits relative to their costs and should be applied consistently. When the PCAOB pursues new or revised standards, a more transparent and empowered standard-setting function—particularly through a formal consultation process within the Office of the Chief Auditor – should be applied.
- Prioritize initiatives with the greatest impact – The ACC cautioned against an overly expansive agenda and recommended a disciplined sequencing of projects to avoid implementation challenges and resource strain.
AFC Resource Highlight: Role of the Internal Auditor – Fraud Risk
In their latest publication, the Anti-Fraud Collaboration (AFC) highlights the critical role of internal audit in assessing and responding to fraud risk, as organizations face an increasingly complex threat environment. The publication includes real-world examples that show the impact that internal audit in detecting fraudulent activity when effectively applying the core principles of professional skepticism. When reading, consider ways in which the internal audit function can be empowered by the audit committee to enhance fraud awareness and help prevent, detect, and respond to fraud.
Strengthening AI Governance
As AI adoption accelerates, governance frameworks are evolving to help boards oversee both opportunities and risks associated with these technologies. KPMG recently shared AI governance principles that boards can use in their oversight. NASDAQ also published a whitepaper with tools, templates, and examples for boards. Here are key considerations for audit committees:
- Audit committee involvement – Audit committees are increasingly expected to oversee AI-related controls, risk management, auditability, and compliance, integrating AI into existing ERM and internal control frameworks rather than treating it as a separate technology initiative.
- Data stewardship as a foundation – Trustworthy AI requires high-quality data and robust data management. Strong data governance and controls provide the foundation that allows AI to be scaled confidently, rather than acting as a constraint.
- Disciplined execution, not AI hype – Investors and regulators are moving past AI ambition toward scrutiny of controls, costs, disclosures, and results. Audit committees play a key role in challenging management to demonstrate alignment between AI deployments, risk appetite, and measurable value creation.
Enterprise Risk Management: Continuous Assessment
In a dynamic environment, continuous risk assessment is essential. Enterprise risk management (ERM) should not be viewed as an annual process, but rather a process that is refreshed throughout the year. A new paper, commissioned by COSO and authored by Crowe, provides guidance on how to effectively perform ERM. The paper shares practical insights into how organizations are embedding ERM into their processes to help shape decisions by leaders.
BDO published an article laying out questions on risk management that boards should consider in their agenda-setting process. Some examples:
- Risk environment – Is there a clear and effective process for identifying, collecting information about, and providing timely alerts for, emerging or changing risks?
- Risk Assessment – When was the last time the Board and management challenged whether the organization’s risk assessment framework still reflects how the organization operates today, given changes in the business, industry, and geographies?
- Risk Monitoring – How is management leveraging automation and artificial intelligence to detect, escalate, and respond to emerging risks—and how does the Board oversee the risks introduced by those technologies themselves?
ICYMI: CAQ Public Policy Technical Alert (PPTA), April 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 April 2026 Alert included these featured articles.
PCAOB Shares Perspectives From 2025 Conversations with Audit Committee Chairs
The PCAOB released a new staff Spotlight publication, 2025 Conversations with Audit Committee Chairs. In 2025, the PCAOB staff gathered insights from more than 250 audit committee chairs. This publication presents high-level observations and takeaways from this engagement.
International Forum of Independent Audit Regulators (IFIAR) Releases 2025 Report on Annual Survey of Audit Inspection Findings
The IFIAR released its 14th annual survey of inspection findings arising from its member regulators’ individual inspections of audit firms affiliated with the six largest global audit firm networks.
IFIAR Releases 2026 Report on the Use of Technology in Audits
The IFIAR released its 2026 report on Use of Technology in Audits – Innovation and Audit Quality, which can be found online.
Why We Observe Memorial Day
We’re halfway through May, and many of you are likely looking forward to the unofficial beginning of summer, Memorial Day. However you choose to spend the Memorial Day weekend, take some time to reflect on the origin of Memorial Day and its meaning. This article provides facts to share with family and friends on Memorial Day.
- The first widely held observation was in 1868 in honor of the soldiers that died during the Civil War.
- The day was originally referred to as “Decoration Day”.
- Memorial Day is similar to Veterans Day, but the distinction is that Veterans Day is intended to honor everyone who has served in the U.S. military.
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.