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 a Roundtable on Tokenization, Changed Date for Roundtable on DeFi
The SEC’s Crypto Task Force held a roundtable on tokenization on May 12. The roundtable, “Tokenization — Moving Assets Onchain: Where TradFi and DeFi Meet,” included discussions on the “Evolution of Finance: Capital Markets 2.0” and “The Future of Tokenization.” 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 Announces Roundtable on Executive Compensation Disclosure Requirements
The SEC announced that it will host a roundtable on June 26, 2025, to discuss executive compensation disclosure requirements. SEC Chairman Paul S. Atkins issued a statement regarding the roundtable, including questions for the staff to consider. The discussion will be streamed live on SEC.gov, and a recording will be posted at a later date.
SEC Updated Questions and Answers for Compliance and Disclosure Interpretations (C&DIs)
The SEC updated the C&DIs around the following topic:
SEC Schedules Investor Advisory Committee Meeting
The SEC scheduled an Investor Advisory Committee meeting for Thursday, June 5, 2025. The agenda includes two panel discussions, “Engaging with Beneficial Owners: Exploring Pass-Through Voting and Other Means of Reaching the Ultimate Beneficial Owner,” and “Beyond the GAAP: Market Perspectives on Non-GAAP Financial Disclosures.” There will also be a discussion of a recommendation regarding the use of mandatory arbitration clauses by registered investment advisers.
SEC Announces Agenda, Panelists for Roundtable on Crypto DeFi
The SEC’s Crypto Task Force announced the agenda and panelists for its June 9 roundtable, “DeFi and the American Spirit.” The event will be open to the public. For online attendance, registration is not necessary; a link to watch the event will be available on June 9 on www.sec.gov.
Statement on Certain Protocol Staking Activities
The SEC issued a statement on certain protocol “staking” activities as part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets.
PCAOB Releases Additional Staff Videos on the Implementation of New Quality Control Standard
The PCAOB posted a new set of staff presentation videos designed to help firms implement four areas of their quality control (QC) system under QC 1000, A Firm’s System of Quality Control. They cover the following topics:
- Roles and responsibilities
- Ethics and independence
- People resources
- Technological and intellectual resources
PCAOB to Host Second Workshop to Assist Smaller Audit Firms With Implementation of New Quality Control Standard
The PCAOB will host a second in-person workshop designed to assist smaller audit firms with the practical implementation of QC 1000, A Firm’s System of Quality Control. The event will be held on June 17, 2025, at the Westin Irving Convention Center in Irving, Texas, from 10:00 a.m. to 4:30 p.m. (CST). There is no fee to attend the June 17 workshop, but advance registration is required and can be completed online.
PCAOB Shares Perspectives From 2024 Conversations With Audit Committee Chairs
The PCAOB released a new staff Spotlight publication, 2024 Conversations With Audit Committee Chairs. This Spotlight presents high-level observations and takeaways from the 272 interviews that staff conducted with audit committee chairs in 2024. The Spotlight also provides answers to questions that audit committee chairs regularly raise in their conversations with the PCAOB, such as:
- How are audits selected for review?
- What does an inspection entail?
- Does the PCAOB have educational training or events for audit committee members?
PCAOB Held a Meeting of Its Standards and Emerging Issues Advisory Group
The PCAOB held a meeting of its Standards and Emerging Issues Advisory Group (SEIAG) on May 22. The meeting agenda included a standard-setting update, emerging issues breakout sessions, discussions on the Implementation of New and Amended Standards and on The Importance of Firm Culture, and the SEIAG Chair’s Wrap-Up. The meeting was streamed live on PCAOBUS.org, and a recording has been posted.
PCAOB Published New Resource to Help Smaller Audit Firms Address Challenges of Auditing Accounting Estimates
The PCAOB published a new resource, Audit Focus: Auditing Accounting Estimates, that provides auditors with reminders and good practices about accounting estimates, an especially challenging aspect of financial statements. This edition of Audit Focus shares:
- Key reminders for auditors from the PCAOB standards related to auditing accounting estimates;
- Staff’s perspectives on common deficiencies in auditors’ work; and
- Good practices that audit firms that audit smaller companies have implemented in the area of accounting estimates.
FASB Issues Standard That Clarifies Guidance for Identifying the Accounting Acquirer in a Business Combination
The FASB published an Accounting Standards Update (ASU) that improves the requirements for identifying the accounting acquirer in FASB Accounting Standards Codification Topic 805, Business Combinations. The ASU will revise current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. The amendments require an entity to consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. The ASU, including effective date information, is available at www.fasb.org.
FASB Improves Guidance on Share-Based Consideration Payable to a Customer
The FASB published an ASU to provide accounting guidance for share-based consideration payable to a customer in conjunction with selling goods or services. The changes improve financial reporting results by addressing the intersection of the requirements of FASB Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, and Topic 718, Compensation—Stock Compensation. The ASU, including effective date information, is available at www.fasb.org.
Investor Advisory Committee Meeting Recap: May 22, 2025
The FASB posted a recap of the Investor Advisory Committee meeting held on May 22, 2025. The topics discussed at the meeting covered:
- Emerging Issues and Trends
- FASB Project Updates
- Leases Post-Implementation Review
- Share-Settleable Instruments
More Global Companies Seek Assurance on Sustainability Reporting, Study by the International Federation of Accountants (IFAC), AICPA & The Chartered Institute of Management Accountants (CIMA) Shows
An updated report from the IFAC and AICPA & CIMA shows almost three-in-four of the largest global companies sought assurance on some aspect of their sustainability disclosures. Audit firms—as opposed to consultants or other service providers—continue to lead (55 percent) in providing assurance on sustainability disclosures by large global companies, with broad variations country to country. More than three-quarters of companies now report sustainability information with financial disclosures in annual or integrated reports. Among other highlights of the updated study:
- Almost all companies (98 percent) report some information on sustainability.
- Use of sustainability information in annual reports continues to rise.
- Five jurisdictions had double-digit increases in sustainability assurance in 2023: Hong Kong, Indonesia, Mexico, Russia and Saudi Arabia.
Webinar: International Standard on Auditing for Less Complex Entities
The Financial Reporting Council (FRC) held a webinar on ‘International Standard on Auditing for Audits of Financial Statements of Less Complex Entities’ (ISA for LCE). This webinar is part of the FRC’s campaign to support U.K. SMEs access audit services in which stakeholders provided feedback on ISA for LCE as part of the FRC’s roundtables. The webinar was held on Wednesday, June 4, 13:00-14:00.
FRC Publish Further Supporting Materials as Part of SME Audit Campaign
The FRC released further supporting material to help small and medium-sized enterprises confidently and effectively engage with the annual audit process. The summary document provides stakeholders with insights into the key considerations and principles that guide a successful audit. It also sets out the key public interest benefits that audit provides, not only for shareholders and potential investors, but for the employees, suppliers, and other stakeholders that rely on the long-term viability of a business.
FRC Consultation Release: Introduction of International Standard on Sustainability Assurance (UK) 5000
The FRC issued a consultation on a proposed U.K. version of the International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements. Stakeholders are invited to comment until July 31, 2025, on the appropriate adoption of ISSA 5000 for the U.K. market by emailing AAT@frc.org.uk.
International Auditing and Assurance Standards Board (IAASB) and International Ethics Standards Board for Accountants (IESBA) Stakeholder Advisory Council Advises on Advancing Standard Setting in the Public Interest
The Stakeholder Advisory Council of the IAASB and the IESBA convened in New York on May 5-6, providing strategic advice to the two boards on key challenges and opportunities in global standard setting for audit, assurance, and ethics, including independence. Reflecting its diverse regional and stakeholder composition, the meeting brought forward a wide range of perspectives to support the public interest and reflect the changing external environment.
IAASB Announced Withdrawal of ISAE 3410 for Assurance Engagements on Greenhouse Gas Statements
The IAASB approved the withdrawal of International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements. This decision followed the approval and certification in 2024 of the International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements. ISSA 5000 is effective for assurance engagements on sustainability information reported for periods beginning on or after December 15, 2026, or as at a specific date on or after December 15, 2026. Consequently, the withdrawal of ISAE 3410 will take effect from the effective date of ISSA 5000.
New FAQ on Going Concern Now Available from IAASB
The IAASB published a new Frequently Asked Questions (FAQ) document to support stakeholders as they implement International Standard on Auditing 570 (Revised 2024), Going Concern. The FAQ document addresses key questions on the enhanced auditor reporting model for going concern that is included in the revised standard.
May 2025 International Accounting Standards Board (IASB) Agenda and Meeting Papers Now Available
The International Financial Reporting Standards (IFRS) Foundation announced that the agenda, papers, and meeting summary of the May 2025 IASB meeting are now available.
May 2025 IASB Update and Podcast Now Available
The IFRS Foundation announced that the IASB Update, summarizing the May 2025 IASB meeting, is now available. The latest episode of the IASB podcast, which provides highlights from the IASB meeting held on May 19–22, is also available.
IFRS Foundation Updated Going Concern Educational Material to Reflect Latest Developments
The IFRS Foundation published an updated version of its educational material to support the consistent application of IFRS Accounting Standards related to going concern assessments. Originally published in 2021, the educational material has been updated to reflect recent developments—most notably, the IASB’s issuance of IFRS 18 Presentation and Disclosure in Financial Statements. The updated educational material, Going concern—A focus on disclosure, also removes outdated references to the IAASB and its project on Going Concern.
Tokyo Takeaways – Insights from the IFRS Foundation’s 2025 Integrated Thinking and Reporting Conference
The IFRS Foundation revealed some of the key takeaways from the IFRS Foundation’s Integrated Thinking and Reporting Conference, which took place on April 3.
- Companies are committed to using the Integrated Reporting Framework to communicate how they create value
- Stakeholders show growing support for applying accounting and sustainability disclosure standards, and for using integrated thinking to provide context and accountability
- Regulators and investors place a strong emphasis on using the Integrated Reporting Framework to drive high-quality human capital disclosures as part of a coherent value creation story
Comment Letter: Response to Commissioner Hester M. Peirce’s Statement ‘There Must Be Some Way Out of Here’
The CAQ posted a comment letter to the SEC Crypto Task Force in response to Commissioner Hester M. Peirce’s Statement There Must Be Some Way Out of Here. In the letter, the CAQ details its views on the following:
- Support for increased regulatory clarity related to crypto assets and the establishment of the SEC Crypto Task Force.
- Importance of coordination between the SEC and other parties, including the FASB and PCAOB, to provide additional accounting and auditing guidance for crypto assets.
- Specific considerations related to auditing crypto asset transactions and holdings and other attestation services related to crypto assets.
CAQ Issues Highlights of Joint Meeting of SEC Regulations Committee and SEC Staff
The CAQ has posted the final highlights of the March 5, 2025 Joint Meeting of the SEC Regulations Committee and the SEC staff. Topics addressed at the meeting include:
- Clawback Rule Checkboxes;
- Update from the Disclosure Review Program leadership team regarding any disclosure observations based on current filing reviews; and
- Adjustments for amounts used in the investment test for acquisitions that include repurchases of its own shares.
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, ESG Initiatives (dheinerichs@thecaq.org) or Annette Schumacher, Senior Director, Professional Practice (ashumacher@thecaq.org).