Public Policy & Technical Alert

As part of the Center for Audit Quality’s (CAQ) ongoing effort to keep members and stakeholders informed on significant public policy and accounting matters, we are pleased to offer the Public Policy and Technical Alert (PPTA). Each month, the PPTA highlights and examines the regulatory, standard-setting, legislative, and broader financial reporting developments impacting the public company audit profession. Please note that the PPTA is intended as general information and should not be relied upon as being definitive or all-inclusive. The CAQ encourages member firms to refer to the rules, standards, guidance, and other resources in their entirety at the hyperlinks provided below. All entities should carefully evaluate which requirements apply to their respective organizations.

In This Issue


SEC Adopts Amendments to Modernize Share Repurchase Disclosure
The SEC adopted amendments to modernize the disclosure requirements relating to repurchases of an issuer’s equity securities, including requiring issuers to provide daily repurchase activity on a quarterly or semi-annual basis, depending on the type of issuer. The amendments will revise and expand narrative repurchase disclosure requirements and add a new item to Regulation S-K. The amendments will improve disclosure and provide investors with enhanced information to assess the purposes and effects of share repurchases.

SEC Updated Questions and Answers for Compliance and Disclosure Interpretations of Exchange Act Rules
The SEC added three Q&As for C&DIs relating to Section 120. Manipulative and Deceptive Devices and Contrivances: Rule 10b5-1—Question 120.26, Question 120.27, and Question 120.28.

SEC Updates Agenda for June 22, 2023, Investor Advisory Committee Meeting
The SEC added the agenda for the Investor Advisory Committee meeting on June 22, 2023. The meeting will include panel discussions on Private Funds/Markets and Outbound Investments in Countries of Concern, Ensuring Digital Engagement Practices Responsibly Expand Investment Opportunities, and Audit Committee Workload and Transparency. The meeting also will include discussion of a recommendation on single-stock ETFs, discussion of a recommendation on 13D/G & 10B-1, and discussion of a recommendation on registered investment adviser oversight, in addition to subcommittee and working group reports.


PCAOB Enhances Transparency of Inspection Reports With New Section on Auditor Independence and More
The PCAOB announced it has enhanced its inspection reports with a new section on auditor independence and a range of other improvements that increase transparency by making publicly available more information that is relevant, reliable, and useful for investors and other stakeholders. The changes will appear in reports for PCAOB inspections completed in 2022, beginning with eight newly released reports that can be found at the Firm Inspection Reports page. The enhanced inspection reports will include:

  • A new section of the report focused on independence violations
  • More information related to fraud procedures and the identification and assessment of the risks of material misstatements
  • More commentary
  • New graphs

PCAOB Releases 2022 Inspection Reports for Mainland China, Hong Kong Audit Firms
The PCAOB announced it released its first-ever inspection reports for audit firms located in mainland China and Hong Kong. In a statement, PCAOB Chair Erica Y. Williams said the reports are a powerful first step toward accountability. The two firms inspected in 2022, KPMG Huazhen LLP in mainland China and PricewaterhouseCoopers in Hong Kong, audited 40% of the total market share of U.S.-listed companies audited by Hong Kong and mainland China firms, and the PCAOB is on track to hit 99% of the total market share by the end of this year.

PCAOB Revises Standard-Setting Agenda and Adds Rulemaking Projects to Enhance Investor Protection
The staff of the PCAOB posted a revised standard-setting agenda that includes the addition of two projects – firm performance metrics and substantive analytical procedures – slated for action in the next 12 months. The PCAOB also announced four new projects, in the areas of firm reporting and transparency, contributory liability, follow-on disciplinary proceedings, and registration, aimed at improving PCAOB rules to protect investors. The rulemaking projects focus on enhancing investor transparency and enforcement of PCAOB rules and standards.

At June 6 Open Meeting, PCAOB to Consider Proposal on Auditor Requirements Regarding Noncompliance With Laws and Regulations
The PCAOB announced it will hold an open meeting on Tuesday, June 6, 2023, at 10:00 a.m. ET. At the meeting, the Board will consider issuing for public comment a proposal amending PCAOB auditing standards related to the auditor’s responsibility for noncompliance with laws and regulations, including fraud, in an audit. The proposed amendments are aimed at strengthening auditor requirements to identify, evaluate, and communicate possible or actual noncompliance with laws and regulations, thereby enhancing investor protection. The public may join the meeting in watch-only or listen-only mode.

PCAOB Announces Agenda for June 7 Meeting of Its Investor Advisory Group
The PCAOB will hold a meeting of its Investor Advisory Group on Wednesday, June 7, 2023, at 10 a.m. ET. The public may view the meeting via a livestream on the PCAOB’s event page, and a recording will be available on that page after the meeting concludes. Agenda items will include the PCAOB Standard-Setting Update, the IAG Subcommittee on Standards Briefing to the PCAOB – Critical Audit Matters, the IAG Subcommittee on Standards Briefing to the PCAOB – Discussion on Fraud, and the IAG Subcommittee on Inspections and Data Transparency Briefing to the PCAOB – Recommendations.


FASB Issues Proposal to Clarify Accounting Guidance Related to Profits Interest Awards
The FASB published a proposed ASU intended to improve generally accepted accounting principles by adding illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement within the scope of Topic 718, Compensation—Stock Compensation. Stakeholders are encouraged to review and provide comments on the proposed ASU by July 10, 2023.

Investor Advisory Committee Meeting Recap: May 11, 2023
The FASB posted a summary of topics discussed at the Investor Advisory Committee (IAC) meeting on May 11, 2023.

  • The FASB staff delivered updates about two current projects on the FASB’s technical and research agendas: Disaggregation—Income Statement Expenses and Statement of Cash Flows.
  • IAC members discussed their observations on the recent market events associated with financial institutions, including a desire for more information about deposit concentrations, enhanced interest rate risk disclosure, more standardized interest rate sensitivity analysis, and more information about economic hedging exposures.
  • IAC members discussed the proposed ASU, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, and expressed support for the increased transparency of crypto assets.
  • IAC members supported the proposed ASU, Income Taxes (Topic 740): Improvements to Income Tax Disclosures.


Statement on Auditing Standards No. 145: The New Risk Assessment Standard
The AICPA posted a video of the chair of the AICPA Auditing Standards Board discussing the changes and importance of Statement on Auditing Standards No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement.

The Current Expected Credit Loss Standard and Not-for-Profits
The AICPA posted an article that explains upcoming changes as a result of the Current Expected Credit Loss standard. When FASB Accounting Standards Update 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, was first released, it was believed that the biggest impact would be to financial institutions. While that industry will still see a significant impact, not-for-profits may also be impacted by this new standard.

AICPA Publishes Detailed Plan to Boost Pool of Prospective CPA Candidates
The AICPA released an updated version of its plan to increase both the number of accounting graduates who pursue a career in the profession and those who go on to obtain a CPA license. The Pipeline Acceleration Plan includes several recommended actions not included in earlier drafts:

  • Expand 529 funds to CPA Exam costs
  • Support for the government audit and finance sector
  • Develop best practices for offshore talent
  • Explore launch of a CPA image campaign

New AICPA Chair Looks to Foster Innovation and Support the Next Generation of Accounting Professionals
The AICPA announced Okorie L. Ramsey, CPA, CGMA, PMP, NACD.DC, Vice President, Sarbanes/Oxley for Kaiser Foundation Health Plan, and Kaiser Foundation Hospitals, will serve as the new chair of the organization. He also will serve as chair of the Association of International Certified Professional Accountants. Ramsey, a CPA who also holds the Chartered Global Management Accountant designation, was elected to the one-year AICPA volunteer post by the organization’s governing Council. In his acceptance speech, Ramsey listed three areas of focus for his term:

  • Innovation to advance the profession.
  • Instill integrity and trust into sustainability.
  • Support the next generation and give them enhanced opportunities to succeed.


Consultation Now Open: The ISSB Seeks Feedback on Its Priorities for the Next Two Years
The International Sustainability Standards Board is seeking feedback on its priorities for its next two-year work plan. The Request for Information Consultation on Agenda Priorities is open for comments until September 1, 2023. Based on research into the information needs of investors, the ISSB has identified four potential projects: three sustainability-related research projects—1) biodiversity, ecosystems, and ecosystem services; 2) human capital; 3) human rights—and a fourth project researching integration in reporting. Stakeholders are asked to provide feedback, preferably by online survey, on:

  • the strategic direction and balance of the ISSB’s activities;
  • the criteria for assessing which sustainability-related matters to prioritize—including topics, industries, and activities; and
  • the scope and structure of potential new research and standard-setting projects.

IOSCO Publishes a Report to Help Its Members Enhance SPAC Regulations
The board of the International Organization of Securities Commissions published a final report on Special Purpose Acquisition Companies (SPACs), which aims to help IOSCO members review or improve their approach to these companies. The report concludes there is currently no one-size-fits-all model for the regulation of SPACs, markets and regulations are still evolving, and it is too early to assess what the most effective approaches are to regulating SPACs. The report identifies a set of common approaches and sets out some considerations for designing or fine tuning SPAC Frameworks. The board agreed to transform IOSCO’s SPAC Network into a Primary Market Network under the leadership of the C1 Chair, Paul Munter.

IASB Moves Equity Method Project to Standard-Setting Work Plan
The International Accounting Standards Board moved its Equity Method project from the research program to the standard-setting work plan. The project’s objective is to develop answers to application questions about the equity method, as set out in IAS 28 Investments in Associates and Joint Ventures, using the principles derived from IAS 28. The IASB plans to publish an exposure draft of proposed amendments for public consultation.

FRC Publishes Minimum Standard for Audit Committees
The FRC announced the Audit Committees and the External Audit: Minimum Standard. The primary objective of the standard is to enhance performance and ensure a consistent approach across audit committees within the FTSE350. The standard will apply to FTSE350 companies. The standard is now available to audit committees on a voluntary basis, ahead of the anticipated legislation that will make compliance with the standard mandatory.

IOSCO Sets the Standard for Global Crypto Regulation
IOSCO issued for consultation detailed recommendations to jurisdictions across the globe as to how to regulate crypto-assets. In a major initiative designed to improve global standards of regulation of crypto-assets, IOSCO has set out how clients should be protected and how crypto trading should meet the standards that apply in public markets. IOSCO has opened a public consultation on its recommendations and aims to finalize them by the end of the year. Comments on the consultation paper should be sent to IOSCO on or before July 31, 2023.

FRC Launches Consultation on Revision to the Corporate Governance Code
The FRC launched a public consultation on proposed revisions to the UK Corporate Governance Code. Areas of focus include:

  • Making necessary revisions to reflect the responsibilities of the board and audit committee for sustainability and ESG reporting and appropriate assurance in accordance with a company’s audit and assurance policy.
  • Amending the Code to take account of the new Audit Committee Standard (Audit Committees and the External Audit: Minimum Standard).

The FRC will also review the existing guidance which supports the Code: Guidance on Audit Committees, Guidance on Board effectiveness, and Guidance on risk management, internal control and related financial and business reporting. Comments on the questions set out in this consultation document are requested by September 13, 2023.

IASB Amends Tax Accounting Requirements to Help Companies Respond to International Tax Reform
The IASB issued amendments to IAS 12 Income Taxes. The amendments give companies temporary relief from accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development’s (OECD) international tax reform—Pillar Two model rules. The amendments will introduce:

  • a temporary exception—to the accounting for deferred taxes arising from jurisdictions implementing the global tax rules. This will help to ensure consistency in the financial statements while easing into the implementation of the rules; and
  • targeted disclosure requirements—to help investors better understand a company’s exposure to income taxes arising from the reform, particularly before legislation implementing the rules is in effect.

Companies can benefit from the temporary exception immediately but are required to provide the disclosures to investors for annual reporting periods beginning on or after January 1, 2023.

IAASB Digital Technology Market Scan: Internet of Things Technologies
The International Auditing and Assurance Standards Board posted a Market Scan bulletin that explores the Internet of Things, focusing on Networks for Asset Monitoring and Data Generation, a technology that enables real time tracking, managing, and monitoring of business processes and assets. It also may form part of an entity’s internal control system and may provide data inputs to non-financial reporting, such as emissions reporting. The IAASB’s Disruptive Technology team covers:

  • What is the Internet of Things? Why is it important?
  • The latest developments
  • What this might mean for the IAASB

IASB Increases Transparency of Companies’ Supplier Finance
The IASB issued disclosure requirements to enhance the transparency of supplier finance arrangements and their effects on a company’s liabilities, cash flows, and exposure to liquidity risk. The amendments supplement requirements already in IFRS Accounting Standards and require a company to disclose:

  • the terms and conditions;
  • the amount of the liabilities that are part of the arrangements, breaking out the amounts for which the suppliers have already received payment from the finance providers, and stating where the liabilities sit on the balance sheet;
  • ranges of payment due dates; and
  • liquidity risk information.

The amendments, which affect IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures, will become effective for annual reporting periods beginning on or after January 1, 2024.

IASB Begins Planned Review of Financial-Crisis-Era Reform to Loan-Loss Accounting
The IASB on May 30 launched a call for stakeholders’ feedback on its post-implementation review of the expected credit loss requirements in IFRS 9 Financial Instruments. Disclosures play an important part in providing investors with the information they need about expected credit losses. As a result, the IASB is also seeking stakeholder feedback on related disclosure requirements in IFRS 7 Financial Instruments: Disclosures in this post-implementation review. The Request for Information Post-implementation Review of IFRS 9 Financial Instruments — Impairment is open for comments until September 27, 2023.

Joint Statement From the IAASB and IESBA Chairs on the Appointment of a Chair for the New Stakeholder Advisory Council
The International Ethics Standards Board for Accountants and the IAASB announced the Public Interest Oversight Board has appointed Alan Johnson to be the inaugural chair of the new Stakeholder Advisory Council. Johnson is a former Trustee of the International Foundation for Ethics and Audit; a chief executive, non-executive director, and audit and risk assurance committee chair; and past president of the International Federation of Accountants. The newly created, diverse forum will advise the IAASB and the IESBA on their strategies and projects.

Revisions to Proposed International Standard on Auditing (UK) 505
The FRC published revisions to proposed International Standard on Auditing (UK) 505 – External Confirmations. The revisions reflect recent enforcement findings as well as ensuring that the standard reflects modern approaches to obtaining confirmations, with additional material on the use of digital platforms, enhanced requirements in relation to investigating exceptions, and a prohibition on negative confirmations.

Monitoring Board Completes Revisions to Its Charter and Memorandum of Understanding With the IFRS Foundation and Sets Out Its 2023-2024 Work Plan
The IOSCO announced the Monitoring Board has concluded work to revise its Charter and Memorandum of Understanding with the Trustees of the IFRS Foundation. The Monitoring Board also has approved and published its Work Plan for the period 2023-2024.


May 2023 Audit Partner Survey
The CAQ announced the findings of its latest Audit Partner Pulse Survey, a biannual survey of U.S. public company audit partners that provides independent and objective perspectives on a range of topics, including the overall health of the economy and business transformation. Among the key findings, fewer than one in five audit partners are optimistic about the economy. Top audit partner concerns driving this pessimism include inflation (the top concern for the second year in a row), cybersecurity threats, and regulation (a 10-point increase since Spring 2022). The survey found organizations are prioritizing cost management and financial performance over other areas like talent and labor.

Comment Letter | PCAOB: AS 1000, General Responsibilities of the Auditor
The CAQ posted a comment letter that provides views to the PCAOB related to its request for comment on its proposed new auditing standard, AS 1000, General Responsibilities of the Auditor in Conducting an Audit and Proposed Amendments to PCAOB Standards. The CAQ’s key observations include:

  • The proposed standard and related amendments will result in more significant changes than what the Board describes within the release text.
  • The auditor’s role should not be confused with a legal duty owed to investors.
  • It is not appropriate for the auditor to be required to make an evaluation of fairness that goes beyond the evaluation of whether the financial statements are presented in conformity with the applicable financial reporting framework.

Continuing Your Digital Assets Journey: A Tool for Audit Committees
The CAQ posted a publication that examines key digital asset-related topics and provides questions for audit committees to consider when discussing these topics with management and the external auditor. The publication explores:

  • Legal and regulatory environment
  • Risk assessment
  • Safeguarding digital assets
  • Third-party service providers
  • Accounting and auditing considerations

Comment Letter Analysis of QC 1000
The CAQ posted an analysis that examines 43 comment letters, from accounting firms, investors, academics, and others, in response to PCAOB Proposed Auditing Standard – A Firm’s System of Quality Control and Other Proposed Amendments to PCAOB Standards, Rules, and Forms (QC 1000). Based on the analysis, the CAQ believes all stakeholders are looking toward the same goal: improved audit quality to best serve investors.


The Center for Audit Quality is a nonpartisan public policy organization serving as the voice of U.S. public company auditors and matters related to audits of public companies. The CAQ promotes high quality performance by U.S. public company auditors; convenes capital market stakeholders to advance the discussion of critical issues affecting audit quality, U.S. public company reporting, and investor trust in the capital markets; and using independent research and analyses, champions policies and standards that bolster and support the effectiveness and responsiveness of U.S. public company auditors and audits to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of CPAs. For more information, visit

The CAQ Public Policy and Technical Alert (PPTA) is intended as general information and should not be relied upon as being definitive or all-inclusive. As with all other CAQ resources, this is not authoritative and readers are urged to refer to relevant rules and standards. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The CAQ makes no representations, warranties, or guarantees about, and assumes no responsibility for, the content or application of the material contained herein and expressly disclaims all liability for any damages arising out of the use of, reference to, or reliance on such material. This publication does not represent an official position of the CAQ, its board, or its members.

Questions and comments about the Public Policy & Technical Alert can be addressed to Vanessa Teitelbaum, Senior Director, Professional Practice (