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 Held Roundtable on Crypto DeFi
The SEC’s Crypto Task Force held a roundtable, “DeFi and the American Spirit,” on June 9. This roundtable is part of the SEC Crypto Task Force’s ongoing series discussing crypto asset regulation. The primary discussion was streamed live on SEC.gov, and a recording has been posted.
SEC Names Kurt Hohl as Chief Accountant
The SEC announced that Kurt Hohl, with nearly 40 years of accounting and auditing experience, has been named Chief Accountant, effective July 7, 2025. Hohl most recently founded Corallium Advisors, which helps businesses navigate the complexities of auditing, regulatory compliance, risk management, and initial public offerings. Before that, he spent 26 years as a partner at Ernst & Young in a variety of roles. Hohl previously served at the SEC from 1989 to 1997, rising to Associate Chief Accountant in the Division of Corporation Finance.
SEC Updated Questions and Answers for Compliance and Disclosure Interpretations (C&DIs)
The SEC updated the C&DIs around the following topic:
SEC Extends Compliance Date to Help Broker-Dealers Fully Test and Implement Daily Reserve Computation Requirement
The SEC extended the compliance date to June 30, 2026, for the amendments to Rule 15c3-3 (the broker-dealer customer protection rule) that the Commission adopted on Dec. 20, 2024. The amendments require certain broker-dealers to increase the frequency of required reserve computations under Rule 15c3-3 from weekly to daily. The compliance date for these required daily reserve computations was originally Dec. 31, 2025.
PCAOB Publishes Annual Report on Broker-Dealer Audits
The PCAOB released its “Annual Report on the Interim Inspection Program Related to Audits of Brokers and Dealers.” A separate publication, “Supplementary Information Related to Audits of Brokers and Dealers,” accompanies the annual report.
Public Markets Advisory Committee Meeting Recap: May 15, 2025
The FASB posted a recap of the Public Markets Advisory Committee (PMAC) meeting held on May 15, 2025. At the meeting, the PMAC members discussed the following topics:
- Accounting for and Disclosure of Intangibles
- Post-Implementation Review on Leases
- Debt and Equity
- Definition of a Public Business Entity
- Agenda Consultation
Accounting for Government Grants
During its June 25, 2025, meeting, the FASB discussed feedback received on the proposed Accounting Standards Update (ASU), Government Grants (Topic 832): Accounting for Government Grants by Business Entities, and completed its redeliberations. The Board directed the staff to draft a final ASU for vote by written ballot.
Engagements Subject to Statements on Standards for Attestation Engagements: Ethics Exposure Draft
The AICPA announced the Professional Ethics Executive Committee (PEEC) is seeking comment on an exposure draft related to engagements subject to the Statements on Standards for Attestation Engagements. PEEC is seeking input on several questions. Comments are due September 5, 2025, and can be sent to ethics-exposuredraft@aicpa.org.
AICPA Seeks Comment on Proposed Criteria for Stablecoin Controls
The AICPA released an exposure draft for the Proposed Criteria for Controls Supporting Token Operations: Specific to Asset-Backed Fiat-Pegged Tokens. The proposed criteria from the AICPA is aimed at providing consistency, transparency, and trust to stakeholders, such as investors and regulators, in reports provided by the creators and issuers of digital assets. The AICPA seeks comments from the public through August 11, 2025.
Financial Reporting Council (FRC) Publishes Landmark Guidance Providing Clarity to Audit Profession on the Uses of AI
The FRC published its first guidance on the use of artificial intelligence in audit, alongside a thematic review of the six largest firms’ processes to certify new technology used in audits. This new guidance outlines a coherent approach to implementing a hypothetical AI-enabled tool, and offers insights into FRC documentation requirements, all designed to support innovation across the audit profession.
International Auditing and Assurance Standards Board (IAASB) and International Ethics Standards Board for Accountants (IESBA) Staff Provide Answers to Key Questions on Implementing International Standard on Sustainability Assurance (ISSA) 5000 and International Ethics Standards for Sustainability Assurance (IESSA)
The IAASB and IESBA announced that their staffs released two new publications to support implementation of the IAASB’s and IESBA’s global sustainability-related standards: ISSA 5000 and the IESSA. Frequently Asked Questions on Sustainability Assurance Engagements issued jointly by IAASB and IESBA staff address practical questions about applying ISSA 5000 and IESSA together.
The IESBA Staff Questions and Answers on IESSA focuses on ethics and independence considerations for practitioners performing sustainability assurance engagements.
IAASB Releases New FAQ for the ISA for LCE
The IAASB published a new Frequently Asked Questions (FAQ) document for the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE), its standard tailored for financial audits of smaller and less complex entities. This new FAQ replaces a previously issued FAQ and represents the final planned component of the IAASB’s implementation support package for the ISA for LCE, complementing the previously released adoption guide, fact sheet, first-time implementation guide, and other supplemental materials.
International Financial Reporting Standards (IFRS) Foundation Trustees Meet in Milan
The IFRS Foundation Trustees met in Milan on June 3–5, 2025. Among the topics discussed were standard-setting oversight, the ongoing transformation program, and engagement. A more detailed meeting summary will be published on the June Trustee meeting page.
IFRS Foundation Publishes Jurisdictional Profiles Providing Transparency and Evidencing Progress Towards Adoption of International Sustainability Standards Board (ISSB) Standards
The IFRS Foundation published an initial set of 17 jurisdictional profiles to provide transparency to capital markets, which evidences the high degree of alignment with the ISSB Standards. Publishing these profiles represents a critical step in providing clarity about progress in achieving a global baseline of sustainability disclosures for capital markets.
IFRS Foundation Publishes Guidance on Disclosures About Transition Plans
The IFRS Foundation published a new guidance document Disclosing information about an entity’s climate-related transition, including information about transition plans, in accordance with IFRS S2 as part of its commitment to supporting the implementation of ISSB Standards.
June 2025 International Accounting Standards Board (IASB) Agenda and Meeting Papers Now Available
The IFRS Foundation announced that the agenda, papers, and meeting summary of the June 2025 IASB meeting are now available. The ISAB update and podcast are now available here.
IASB to Finalize Examples on Reporting Uncertainties in the Financial Statements as Illustrated Through Climate
The IFRS Foundation announced that the IASB decided to proceed with seven illustrative examples that aim to improve the reporting of uncertainties in the financial statements. These examples use climate-related scenarios to illustrate principles that apply broadly to all types of uncertainties. To support timely and informed application, the IASB plans to publish a near-final draft of the examples early in the third quarter of 2025. The IASB expects to issue the final document in October 2025.
IASB Launches Review of IFRS 16 Leases
The IFRS Foundation announced that the IASB published a Request for Information as part of its Post-implementation Review of IFRS 16 Leases. This review will evaluate whether IFRS 16 is broadly working as intended for investors, companies, auditors, and regulators. The Request for Information is open for comment until October 15, 2025.
IASB Issues Revised Practice Statement on Management Commentary
The IFRS Foundation issued the revised Practice Statement on management commentary. The revised IFRS Practice Statement 1 Management Commentary supports improvements to and greater global alignment in management commentary and narrative reports accompanying the financial statements. The IASB intends for the revised Practice Statement to serve as a global benchmark for regulators to use in updating or developing their national requirements and guidance. It would also provide a comprehensive resource for companies to help meet investors’ information needs.
Audit Partners Say Economic Uncertainty and Geopolitical Risks Rise, While Companies Continue Integrating AI to Improve Customer Experience, According to Latest Survey
The CAQ released its Spring 2025 Audit Partner Pulse Survey, providing insights from audit partners at the nation’s leading public company audit firms. Now in its fourth year, the survey captures audit partners’ views on the future of the U.S. economy, evolving business risks, and workforce trends. Key findings from the report include:
- Increasing Economic Pessimism
- Shifting Workforce Strategies
- Integration of New Technologies
Strengthening the Accounting Pipeline: CAQ Talent Updates
The CAQ shared a blog post written by Liz Barentzen, Vice President, Operations and Talent Initiatives at the CAQ, on strengthening the accounting pipeline. Barentzen discusses the latest updates on the CAQ’s efforts to attract the next generation of leaders in audit and accounting, including:
- Annual Student Research: Stability and Flexibility Remain Key,
- Accounting+ Annual Report: Continued Impact in 2024,
- Accounting for Your Future: In-Person Events,
- Steelers Showcase: Exposing Pittsburgh Students to Accounting,
- The Power of Collaboration: Amplifying Our Impact, and
- A Look at the Talent Pipeline: Capital Markets Pulse Podcast.
Institutional Investor Survey: Research Findings, Artificial Intelligence
The CAQ announced the research findings from a survey of institutional investors in the United States on artificial intelligence. Conducted by KRC Research, this research focused on opinions and preferences related to the use of GenAI in public company audits and opinions on the use of GenAI in portfolio companies among institutional investors.
S&P 500 Sustainability Reporting and Assurance Analysis
The CAQ analyzed 2023 data from S&P 500 companies to understand what they disclosed about sustainability reporting standards and frameworks, greenhouse gas emissions, assurance, or verification over the sustainability information, and net zero or carbon neutral commitments. Among the key takeaways:
- 99% of S&P 500 companies reported sustainability information in 2023, remaining steady in relation to the 98% that did so in 2022.
- 73% of S&P 500 companies that reported sustainability information in 2023 obtained assurance over certain of that information (up from 70% in 2022).
- The scope of information being subject to assurance continued to increase with most companies assuring their GHG emissions and at least 1–3 other sustainability metrics.
- 24% of companies that obtained assurance, obtained assurance from public company auditors (up from 21% in 2022).
- There remains inconsistency in how other assurance/verification providers describe their compliance with the IAASB assurance standards, raising questions about the consistency of their compliance.
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 www.thecaq.org.
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 Donnie Heinerichs, Manager, Professional Practice (dheinerichs@thecaq.org) or Annette Schumacher, Senior Director, Professional Practice (ashumacher@thecaq.org).