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
Statement on the Spring 2025 Regulatory Agenda
The SEC released a statement by Chairman Paul S. Atkins regarding the release of the Spring 2025 Unified Agenda of Regulatory and Deregulatory Actions by the Office of Information and Regulatory Affairs on September 4, 2025.
SEC Crypto Task Force to Host Roundtable on Financial Surveillance and Privacy
The SEC announced that its Crypto Task Force will host a public roundtable on financial surveillance and privacy on Friday, October 17, 2025, from 1 p.m. to 4 p.m. at the SEC’s headquarters.
James Moloney Named Director of Division of Corporation Finance
The SEC announced that James J. Moloney, a longtime and highly respected legal counsel to public companies worldwide on corporate transactions and corporate governance issues, has been named director of the agency’s Division of Corporation Finance, effective next month. Moloney previously served at the SEC for six years prior to joining Gibson Dunn & Cutcher, where he has worked the past 25 years, ascending from corporate associate to equity partner.
SEC Investor Advisory Committee Hosts Panels to Discuss Reconsideration of the Eligibility Criteria and Regulatory Treatment of Foreign Private Issuers
The SEC’s Investor Advisory Committee on September 18, 2025, hosted two panel discussions on reconsidering the eligibility criteria and regulatory treatment of foreign private issuers. The committee also discussed a potential recommendation regarding retail investor access to private market assets. The full agenda is available on the committee’s webpage.
Draft 2026 SEC Taxonomies
The SEC announced that the draft 2026 update to the SEC taxonomies is now available for feedback on the technical design of the taxonomies and includes updates to the SEC taxonomies as part of the annual review and update process for all SEC taxonomies accepted in the Electronic Data Gathering, Analysis, and Retrieval system. The SEC is seeking technical feedback via email to StructuredData@sec.gov using “Draft 2026 SEC Taxonomies” as the subject of the email no later than 4 p.m. EST on November 12, 2025.
A Study by and Recommendations From the Technology Innovation Alliance (TIA) Working Group Posted to PCAOB Website
The PCAOB announced that a study by and recommendations from the TIA Working Group have been posted to the PCAOB website. The TIA Working Group prepared the following two documents that have been posted to the PCAOB website:
New PCAOB Audit Focus Provides Auditors of Broker-Dealers With Insights on Exemption Report Reviews
The PCAOB released a staff publication, Broker-Dealer Audit Focus: Review Engagements Regarding Exemption Reports. This edition of Broker-Dealer Audit Focus highlights key reminders for auditors from Attestation Standard No. 2, Review Engagements Regarding Exemption Reports of Brokers and Dealers, provides the staff’s perspectives on common deficiencies observed in auditors’ work, and shares good practices that PCAOB staff has observed. Broker-Dealer Audit Focus is a new series of PCAOB publications that aims to provide easy-to-digest information to auditors of registered broker-dealers.
PCAOB Publishes New Edition of Data Points on Who Audits Emerging Growth Companies
The PCAOB released a new edition of Data Points: Who Audits Emerging Growth Companies? Prepared by the PCAOB’s Office of Economic and Risk Analysis, the Data Points series presents concise, data-driven insights relevant to audits.
PCAOB Posts Board Policy Statement and Provides Staff Guidance on Evaluating the Reliability of External Electronic Information Provided by the Company
On September 18, 2025, the PCAOB released a Board policy statement to assist auditors in implementing paragraph .10A of AS 1105, Audit Evidence.
On October 1, 2025, the PCAOB published staff guidance providing examples of the application of Paragraph .10A of AS 1105, Audit Evidence.
The amendments to AS 1105, adopted in June 2024, become effective for audits of financial statements for fiscal years beginning on or after December 15, 2025.
PCAOB Held Meeting of Its Investor Advisory Group
The PCAOB held a meeting of its Investor Advisory Group on September 25, 2025. The meeting agenda included IAG presentations to the Board on private market valuations, internal controls of financial reporting, decision-useful critical audit matters, and a DRI update on foreign inspections. A recording is available here.
PCAOB Concludes 2025 PCAOB/Management Science Registered Reports Conference
The PCAOB announced that on September 27, 2025, the Board concluded its 2025 Registered Reports Conference, an event designed to drive the development of rigorous economic research in areas of significance to the PCAOB’s mission. Nine research proposals were chosen for presentation at the conference. The proposals addressed three broader themes – the use of technology in the audit, audit market structure and incentives, and critical audit and financial reporting processes. The conference agenda and proposals are available on the PCAOB website.
FASB Issues Standard That Makes Targeted Improvements to Internal-Use Software Guidance
The FASB published an Accounting Standards Update (ASU) that updates the guidance on accounting for internal-use software costs. The amendments in the new ASU apply to all entities subject to guidance in FASB Accounting Standards Codification Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The amendments in the ASU are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.
FASB Issues Standard on Derivatives Scope Refinements
The FASB published an ASU that addresses stakeholders’ concerns about (1) the application of derivative accounting to contracts with features based on the operations or activities of one of the parties to the contract and (2) the diversity in accounting for share-based noncash consideration from a customer that is consideration for the transfer of goods or services. The ASU is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted.
FASB Seeks Public Comment on Proposed Guidance on Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock
The FASB published a proposed ASU that would provide authoritative guidance on how an issuer should initially measure paid-in-kind (PIK) dividends on equity-classified preferred stock. The proposed ASU would require that PIK dividends on equity-classified preferred stock be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. Stakeholders are encouraged to review and provide comments on the proposed ASU by October 27, 2025.
AICPA Adds Chapter on Auditing Crypto Lending and Borrowing to Digital Assets Practice Aid
The AICPA added a new chapter to its Digital Assets Practice Aid that gives practitioners practical guidance for auditing lending and borrowing transactions of digital assets. The update reflects the rapid growth of crypto markets and the need for auditors to address the risks that come with them. The chapter walks through two common scenarios:
- When a borrower of a crypto intangible asset is not required to post collateral; and
- When a borrower is required to post collateral.
CPA Firms Report Steady Growth in Revenue and Profit, AICPA Research Finds
The AICPA released the results of its 2025 National Management of an Accounting Practice Survey revealing that firms across the country are reporting strong revenue growth and continued increases in staff compensation at all levels.
Simultaneous Employment: Official Release of New Ethics Guidance
The AICPA announced that its Professional Ethics Executive Committee approved revisions to the AICPA Code of Professional Conduct at its August 2025 meeting. The effective date for these changes is September 15, 2026.
AICPA Seeks Comment on Administrative Peer Review Proposal for Firms With Private Equity Backing and Other Alternative Practice Structures
The AICPA announced that its Peer Review Board is seeking public comment on a change to its peer review program that would centralize the administration of peer reviews of firms operating under alternative practice structures, including those with private equity investments. The change, outlined in the proposed Peer Review Standards Update No. 3, would require firms operating under non-traditional business models to have their peer reviews administered by the AICPA’s National Peer Review Committee, rather than one of the 23 state administering entities. The comment period for the proposed update will be open until October 25, 2025. If approved by the Peer Review Board, it would be effective for peer reviews with years ending on or after December 31, 2025.
Financial Reporting Council (FRC) Launches Bold New Program to Build Capability and Support Growth by Small U.K. Audit Firms
The FRC announced a new initiative to support the development of the capability and quality management by small audit firms looking to establish a greater presence in the U.K. Public Interest Entity (PIE) audit market. This initiative will introduce a new and more proportionate supervisory approach, designed to enhance audit quality and reflect the unique needs of smaller firms.
International Auditing and Assurance Standards Board (IAASB) Adopts New Publicly Traded Entity Definition Aligned with the International Ethics Standards Board for Accountants (IESBA) Code of Ethics
The IAASB released narrow scope amendments to its standards revising the definition of listed entity to align with the definition in the IESBA’s Code of Ethics for Professional Accountants (including International Independence Standards). The new definition will amend the International Standards on Quality Management and International Standards on Auditing. In addition, amendments to International Standard on Review Engagement 2400 (Revised), Engagements to Review Historical Financial Statements, aim to align with the IESBA Code of Ethics regarding certain public disclosures about the application of independence requirements. The narrow scope amendments become effective for engagements for periods beginning on or after December 15, 2026.
IAASB 2025 Handbook Now Available for Digital Access and Print Orders
The IAASB released the 2025 edition of its Handbook of International Quality Management, Auditing, Review, Other Assurance, and Related Services Pronouncements. The 2025 Handbook is available as a PDF download; print copies can be ordered via the IAASB website.
September 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 September 2025 IASB meeting are now available. The IASB update and podcast are now available here.
October 2025 FASB-IASB Education Meeting Agenda and Papers Now Available
The IFRS Foundation held their October 3, 2025, FASB–IASB education meeting. The agenda, papers, and video are now available.
IESBA Publishes New Guidance to Support Implementation of Standards on External Experts and Sustainability Assurance
The IESBA released two new staff publications to enhance understanding and support global adoption and implementation of its ethics standard on Using the Work of an External Expert as well as the International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA), both of which are effective from December 2026. These publications, Questions and Answers on Using the Work of an External Expert and Proportionality of the IESSA, explain key aspects of the standard related to using the work of an external expert and the proportionality of the ethics and independence provisions for sustainability assurance in the IESSA.
IESBA September 2025 Board Meeting Preview
The IESBA posted a short video that offers a brief preview of the key topics and discussions that shaped the agenda for the IESBA Board’s September meeting. The agenda, papers, and presentations are available here.
Comment Letter: Concept Release on Foreign Private Issuer Eligibility; File Number S7-2025-01
The CAQ posted a comment letter that shares its views and provides input on the SEC’s Release No. S7-2025-01, Concept Release on Foreign Private Issuer Eligibility. Overall, the CAQ supports the Commission’s efforts to consider whether the current Foreign Private Issuer definition should be revised.
Bridging the Gap: What New Research Tells Us About Attracting Future Accountants
The CAQ shared a blog post written by Liz Barentzen, Vice President, Operations and Talent Initiatives, on the CAQ’s newest report, through its partnership with EVERFI. Career Interest and Perceived Value of Accounting shines a light on how to better foster meaningful connections with students regarding careers in the accounting profession. Barentzen discusses the research, including career decision-making trends, the role of in-classroom exposure, why sequencing outreach matters, and future steps.
Comment Letter: Letter to the SEC Supporting the Deferral of Effective Date of the PCAOB’s QC 1000
The CAQ shared a letter to the SEC in which it expressed support for the deferral of the effective date of the PCAOB’s QC 1000 from December 15, 2025, to December 15, 2026. Additionally, the CAQ encouraged the SEC and PCAOB to gather information on certain topics which represent implementation challenges for some firms to determine whether targeted amendments would be appropriate to enhance the scalability of the standard and address unintended consequences.
The Impact of Fraud on U.S. Public Companies
The CAQ announced a webcast scheduled for October 30, 2025, with the Anti-Fraud Collaboration (AFC) that will explore the pervasiveness and impact of fraud at U.S. public companies. Participants will gain insights into recent survey findings that shed light into the current fraud risk environment and leading practices for fraud deterrence and detection.
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).