Welcome to another edition of Capital Markets Pulse, a monthly newsletter from the Center for Audit Quality that brings you insights, resources, and tools on the latest issues impacting the capital markets
Can you believe we are officially in the second half of 2025? The past few months have been action-packed for the profession, full of regulatory updates and developments in emerging areas like cybersecurity and artificial intelligence. Thankfully, the Center for Audit Quality provides resources to help financial reporting professionals stay on top of these developments.
Read on for what’s on my radar this month.
Please note that these perspectives are my own. If this email was forwarded to you, subscribe here so that you never miss a public company auditing update.
The accounting talent pipeline continues to be a challenge, especially as experienced accountants retire. In May, I sat down with Susan Coffey, CEO of the Association of International Certified Professional Accountants, and Anna Durst, CEO of the Nevada Society of CPAs, to discuss the current state of the profession’s pipeline and how the landscape is evolving.
From addressing barriers to CPA licensure to exploring how technology is shaping the profession, this episode is a must for anyone interested in the future of accounting. Listen to the episode now.
Be sure to subscribe to the latest episodes on Spotify, Apple Podcasts, or Amazon Music.
Profession Updates
The Audit Effect: The Role of the Auditor in the NBA Draft
In an era where public trust can be fragile and speculation spreads quickly, independent assurance plays a critical role in upholding the credibility of high-stakes processes, like the NBA Draft Lottery. With recent years producing improbable outcomes, including the Dallas Mavericks landing the first overall pick in 2025 with just a 1.8% chance, skepticism from fans and media is inevitable. But behind the suspense and speculation is a process designed with rigor, transparency, and oversight. Central to that process is the presence of a third-party auditor, whose sole role is to ensure the lottery is conducted in full compliance with the NBA’s established rules.
This year, an auditor from Ernst & Young (EY) also witnessed the lottery process. Their participation brings more than just credibility—it brings accountability. By observing and verifying the integrity of the draft lottery, the auditor provided a layer of assurance that strengthens confidence in the outcome. It’s a reminder that, whether in financial markets or professional sports, third-party assurance plays a vital role in protecting fairness, reinforcing public trust, and validating the systems we rely on. This is the Audit Effect.
PCAOB Updates
Congressional Reconciliation Legislation
The 2025 reconciliation package, which successfully passed both the House and the Senate before going to President Trump for his signature, addressed a wide range of priorities for the current administration. Notably, the final legislation did not include a provision that would have folded the Public Company Accounting Oversight Board (PCAOB) into the Securities and Exchange Commission (SEC) after a finding by the Senate Parliamentarian. The exclusion of this language from the final bill preserves the PCAOB’s current oversight structure and functions.
The CAQ believes strong oversight of the public company audit profession recognizes the pivotal role auditors play in fostering trust in our capital markets, supports high standards of audit quality and provides for long-term economic growth. We remain committed to collaborating with policymakers to preserve and enhance the independence, expertise, and transparency that underpin effective oversight of the public company audit profession and define the U.S. capital markets today.
PCAOB Held the April 29 Meeting of Its Investor Advisory Group
The PCAOB held a virtual meeting of its Investor Advisory Group (IAG) on April 29. The meeting agenda included IAG presentations to the Board on investor expectations of the audit, artificial intelligence opportunities and challenges, an update on the talent pipeline, as well as an IAG request for notable critical audit matters. A recording of the meeting is available here.
Chair Williams announced the smaller firm resource group at the PCAOB SEIAG Meeting
On May 12, the PCAOB held a meeting of its Standards and Emerging Issues Advisory Group (SEIAG). The meeting included a standard-setting update, emerging issues breakout sessions, discussions on the implementation of new and amended standards, the importance of firm culture, and more. During the meeting, Chair Williams announced the creation of a Smaller Firm Resource Group to help advise PCAOB staff on a range of matters including application of PCAOB standards, PCAOB inspections, and economic considerations as they relate to smaller firms. Watch the recording here.
SEC updates
Cybersecurity Disclosure Rule Faces Pushback
A coalition of leading American banking associations is urging the SEC to revoke its cybersecurity incident disclosure rule, citing conflicts with existing confidentiality requirements designed to protect critical infrastructure. In a joint letter, the groups argue that the rule complicates incident response and creates market confusion. Their concerns come amid rising cybersecurity threats across the financial sector, including recent high-profile breaches targeting crypto exchanges like Coinbase, underscoring the urgency of finding the right balance between transparency and security.
The CAQ previously shared resources on how the financial reporting profession can better understand and comply with the disclosure rules. We will continue to monitor as the situation progresses.
New SEC Chief Accountant, Kurt Hohl
The SEC has named Kurt Hohl as Chief Accountant, effective July 7, 2025. With nearly four decades of accounting and auditing experience, including senior roles at EY and a prior tenure at the SEC, Hohl brings deep technical expertise and regulatory insight to the role. Chairman Atkins praised Hohl’s integrity and international perspective, calling his return a win for markets and investors. Acting Chief Accountant Ryan Wolfe will return to his position in the SEC’s Division of Enforcement.
On behalf of the CAQ, we extend our warmest welcome to Chief Accountant Hohl and look forward to working with him. We also want to thank Acting Chief Accountant Wolfe for his leadership these past few months.
CAQ Updates
The Use of GenAI in Capital Markets and Corporate Reporting
As the technological landscape continues to evolve, organizations are increasingly looking at ways to integrate generative Artificial Intelligence (GenAI) into their workstreams. In our latest Institutional Investor Survey, nearly all surveyed respondents trust the use of GenAI to support the audit processes and say the use of GenAI increases trust in the audit of public companies. GenAI will continue to be at the forefront of changes in the coming years, but despite it all, the human element remains the most critical.
The Spring 2025 Audit Partner Pulse Survey (see more on this below) confirmed that GenAI is here to stay. Consistent with findings from Fall 2024, audit partners report that companies are increasingly using GenAI to enhance customer experience, streamline service and support, and automate routine workflows. These efficiency improvements align with broader workforce strategies, enabling companies to boost productivity and upskill employees in GenAI competencies without requiring major structural changes to their teams.
As the audit profession explores the potential of advanced GenAI in corporate reporting, we are focused on building and maintaining trust in corporate disclosures. Auditors understand that successful integration of emerging technologies depends on not just innovation, but innovation that is grounded in transparency, accountability, and collaboration. That’s why the profession is engaging in meaningful dialogue with technology leaders, policymakers, and investors to ensure responsible use of AI. These efforts aim to strengthen confidence in how GenAI is applied within the financial reporting ecosystem, supporting both the reliability of information and the resilience of our capital markets.
The value proposition is clear: as GenAI continues to expand, companies that invest in fluency now are positioning themselves to innovate down the line with relatively low upfront costs. This is reflective of what we have seen with firms like PwC, BDO, and RSM investing in this advanced technology in the last few months.
We have previously shared how auditors and audit committees can better elevate their understanding of GenAI and what it means for the profession, and we will continue to monitor and share resources as the profession responds to this advanced technology.
The Latest Trends on Sustainability Reporting
Here at the CAQ, we regularly analyze S&P 500 companies’ sustainability disclosures to understand corporate reporting trends and emerging areas of investor interest and provide recommendations to support all members of the profession.
We released our annual analysis of S&P 500 companies’ sustainability information. We found that the majority of companies (99%) in the S&P 500 reported some form of sustainability information. More companies are also choosing to work with public company auditors when they obtain assurance, with 24% utilizing the expertise of public company auditors (up from 21% the prior year). This reflects a growing recognition of the value these professionals bring to the table.
At the CAQ, we believe in the power of trust and transparency. When companies engage public company auditors for assurance, they’re helping build confidence in the sustainability information that stakeholders rely on. The CAQ will continue to monitor and provide analysis as the reporting landscape responds to increasing demand from investors and other stakeholders.
CAQ Releases the Spring 2025 Audit Partner Pulse Survey
2025 has been marked by economic volatility, technological advancement, and workforce challenges. To assess how audit partners at leading firms assess our economic landscape, the CAQ released our latest Audit Partner Pulse Survey in June. Audit partners continue to emphasize strong financial performance, smart growth strategies, and careful cost management as top areas of focus for the year ahead. In a more volatile and unpredictable environment, doubling down on fundamentals could be the key to helping businesses weather whatever comes next. Explore additional insights here.
The AFC Releases Report on SEC and PCAOB Enforcement Trends
The auditing profession is currently experiencing an evolving regulatory climate. The Anti-Fraud Collaboration’s (AFC) new report, in collaboration with the CAQ, analyzes more than 400 SEC and PCAOB enforcement actions from 2021–2024.
Analyzing matters that have been the subject of enforcement actions can serve as a helpful indicator for what future enforcement priorities might look like. The report identified four main enforcement trends and regulatory insights, including:
- Revenue recognition remains a top regulatory focus due to its importance to investors and vulnerability to fraud.
- Post-M&A accounting issues have led to more PCAOB enforcement actions, while SEC actions have declined in this area.
- Auditors face rising penalties, with both the PCAOB and SEC imposing significant fines in cases involving integrity violations.
- Regulators are using sweeps to target compliance issues, including audit committee communications and inadequate disclosures.
Explore more takeaways here.
NACD Blog on the 2025 Fraud Landscape
Our own Vanessa Teitelbaum reviewed the recently published AFC report and explored key insights into the current fraud landscape in a blog for the National Association of Corporate Directors (NACD). In her blog, she highlights ongoing trends in enforcement actions, the outlook for the fraud landscape in 2025 and beyond, and how boards can leverage this information for more effective compliance oversight.
Read the full blog now.
The Talent Pipeline: Updates on Accounting+
The accounting profession, like many others, is navigating a workforce shortage.
Since its inception four years ago, the Accounting+ program has been working to shift perceptions to demonstrate that a career in accounting is not only stable but also dynamic and rewarding. Our latest report, Expanding the Accounting Profession Pipeline, found that reaching students about the benefits of an accounting career while they are still in high school is crucial.
The second year of the CAQ’s Accounting+ partnership with the Pittsburgh Steelers continues to show great results. This last school year, we worked with a new group of Pittsburgh-area students, educating them about accounting and how it plays a role in the sports industry.
Our “Steelers Showcase” program, a series of three events during the school year, wrapped up in April at Acrisure Stadium. At this event, students were tasked with solving a financial mystery alongside representatives from our member firms, exposing them to what a career in forensic accounting could look like. For the first two events, students heard from our partners at the Steelers v. Ravens game and the Steelers’ practice facility about how to get started in accounting and prepare for academic and professional success.
This partnership continues to help us spotlight diverse career paths in accounting, especially in industries students are passionate about. You can watch our 2024-2025 wrap-up video on the Steelers’ website.
In an Audit in Action blog, my colleague, Liz Barentzen, recaps the progress made so far and how we must continue to break down misconceptions and show the next generation what’s possible in accounting.
I encourage you to explore our resources as the profession looks to strengthen the talent pipeline. Together, we can build the next generation of accountants.
Beyond the Balance Sheet
Don’t miss the CAQ’s latest Wall Street Journal content, “Beyond the Balance Sheet,” which explores how public company auditors deliver value by strengthening confidence in today’s complex financial landscape. Featuring insights from auditors, this fictionalized case study highlights the auditor’s role in addressing emerging risks and upholding trust in capital markets.
Julie Bell Lindsay
Chief Executive Officer, CAQ