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
Commissioner Hester Peirce Announces Crypto Task Force Staff
The SEC announced the members of the Crypto Task Force staff, which is advising the SEC on matters related to crypto. The task force is composed of staff from the Acting Chairman’s office and other divisions and offices across the Commission.
SEC Crypto Task Force Hosts Roundtable on Security Status
The SEC announced that its Crypto Task Force will host a series of roundtables to discuss key areas of interest in the regulation of crypto assets. The “Spring Sprint Toward Crypto Clarity” series began on March 21 with its inaugural roundtable, “How We Got Here and How We Get Out – Defining Security Status.” The primary discussion was streamed live on SEC.gov, and a recording has been be posted.. Information regarding the agendas and speakers for future roundtables can be found on the Crypto Task Force webpage.
SEC Updates Questions and Answers for Compliance and Disclosure Interpretations (C&DIs)
The SEC updated the C&DIs around the following topics:
- Securities Act Sections
- Securities Act Rules (Securities Act and Crowdfunding)
- Securities Act Forms
- Tender Offer Rules and Schedules
SEC Announces Agenda, Panelists for Roundtable on Artificial Intelligence (AI)
The SEC announced the agenda and panelists for its roundtable on AI in the financial industry that was held on March 27. The roundtable included opening remarks from Acting Chairman Mark Uyeda, Commissioner Hester Peirce, and Commissioner Caroline Crenshaw. There were panels on “The Benefits, Costs, and Uses of AI in the Financial Industry,” “Fraud, Authentication, and Cybersecurity,” “AI Governance and Risk Management,” and “What’s Next/Future Trends.” The webcast archive can be found here.
SEC Votes to End Defense of Climate Disclosure Rules
The SEC voted to end its defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions. The rules, adopted by the Commission on March 6, 2024, create a detailed and extensive special disclosure regime about climate risks for issuing and reporting companies.
SEC Staff Announce Enhanced Accommodations for Issuers Submitting Draft Registration Statements
The Division of Corporation Finance announced expanded accommodations available for issuers that submit draft registration statements for nonpublic review. The Division believes that the expansion of these accommodations can facilitate capital formation, without diminishing investor protection.
SEC Releases Statement on Certain Proof-of-Work Mining Activities
The Division of Corporation Finance released a statement providing its views on certain activities on proof-of-work networks known as “mining.” Specifically, the statement addresses the mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network, and are used to participate in and/or earned for participating in such network’s consensus mechanism or otherwise used to maintain and/or earned for maintaining the technological operation and security of such network.
PCAOB Forums for Auditors of Small Businesses and Auditors of Broker-Dealers
PCAOB Chair Erica Y. Williams hosted an in-person forum on auditing in the small business environment and on auditing broker-dealers in Chicago on April 3, 2025. In addition, PCAOB Board Member George R. Botic will host a similar in-person forum on May 1, 2025. The one-day event – part of a series of 2025 forums – will take place at the Hyatt Regency Jersey City in Jersey City, New Jersey.
New PCAOB Publication Aims to Help Auditors Get Form AP Right
The PCAOB released a staff publication, Audit Focus: Form AP. This edition of Audit Focus shares:
- Key reminders for auditors from the PCAOB rules, standards, and staff guidance related to Form AP;
- Staff’s perspectives on common deficiencies; and
- Good practices that the staff has observed, such as the use of structured templates, guidance on how to complete the templates, or policies mandating review of Form AP information to ensure accuracy and completeness.
PCAOB Staff Provides Briefing on Latest Quality Control Implementation Efforts
At an open meeting on March 19, the PCAOB staff provided the Board with an overview of the latest implementation efforts related to QC 1000, A Firm’s System of Quality Control, with a specific focus on the monitoring and remediation process. A recording was made publicly available on the PCAOB’s website following the meeting.
PCAOB Posts Three Staff Presentation Videos on Monitoring and Remediation Process Under New Quality Control Standard
The PCAOB posted a series of three staff presentation videos designed to help auditors implement the monitoring and remediation process under QC 1000, A Firm’s System of Quality Control. The three videos cover the following topics:
- Quality Control – Monitoring and Remediation Part I: Overview, General Requirements, and Monitoring Activities
- Quality Control – Monitoring and Remediation Part II: Engagement Deficiencies (including AS 2901), QC Observations, and QC Deficiencies
- Quality Control – Monitoring and Remediation Part III: Performing Root Cause Analysis and Designing, Implementing and Testing Remedial Actions
The PCAOB Published a Staff Spotlight Observing Improvement in Deficiency Rates, Along With 2024 Inspection Reports for the Six Firms in the U.S. Global Network Firms (GNF)
The PCAOB published a staff Spotlight, which summarizes the 2024 inspection results, along with individual inspection reports for the six GNFs. The publication details expectations for significant improvements in aggregate Part 1.A deficiency rates across firms in 2024.
SEC Accepts 2025 FASB Taxonomies
The FASB announced that the SEC has accepted the 2025 GAAP Financial Reporting Taxonomy (GRT), the 2025 SEC Reporting Taxonomy (SRT), and the 2025 GAAP Employee Benefit Plan Taxonomy (EBPT). The FASB also finalized the 2025 DQC Rules Taxonomy and the 2025 GAAP Meta Model Relationships Taxonomy, which together with the GRT, the SRT, and the EBPT are collectively referred to as the “FASB Taxonomies.”
Financial Accounting Standards Advisory Council Meeting Recap: March 4, 2025
The FASB posted a recap of the Financial Accounting Standards Advisory Council quarterly meeting that took place on March 4, 2025. The FASB chair provided highlights on FASB activities, and staff members from the SEC and PCAOB and the AICPA Auditing Standards Board Chair commented on current issues and activities. Council members discussed the following topics:
- Post-Implementation Review (PIR)—Leases
- Consistency in Accounting Standards
- Topic 815—Derivatives Scope Refinements
AICPA Publishes Comprehensive Criteria for Reporting on Stablecoins
The AICPA released the 2025 Criteria for Stablecoin Reporting: Specific to Asset-Backed Fiat-Pegged Tokens. These criteria provide a framework to stablecoin issuers for presenting and disclosing information related to the tokens they issue, and to report on the availability of cash or other assets that back them. Next month, as a second part of the stablecoin reporting criteria, the Assurance Services Executive Committee of the AICPA will release the Proposed Criteria for Controls Supporting Token Operations: Specific to Asset-Backed Fiat-Pegged Tokens for public comment. As these control criteria are an important part of the overall stablecoin reporting, they will be incorporated into the 2025 Criteria for Stablecoin Reporting document once finalized.
Comment Period Opens for AICPA Task Force Recommendations on Independence Rule Changes Related to Private Equity Investments in Accounting Firms
A task force of the AICPAs’ Professional Ethics Executive Committee (PEEC) posted a discussion memo on potential revisions to independence rules related to alternative practice structures, changes necessary because of the increasing prevalence of private equity investment in accounting firms. The committee’s Alternative Practice Structures Task Force will seek comment through June 15 on the memo’s preliminary conclusions and two interpretation options. After the comment period for the discussion memo ends, PEEC plans to use the feedback to supplement its research and develop a formal exposure draft.
Creps Named Next Chair of AICPA Auditing Standards Board
AICPA announced that Catherine “Halie” Creps, a partner in KPMG’s Department of Professional Practice, has been named the new chair of its Auditing Standards Board. Creps will assume her duties at the end of May. She succeeds Sara Lord of RSM US LLP. Seven new members will join the board at the end of May. They are:
- Michael Brand, CPA, CGMA, assurance member, BMSS LLC
- Heather A. Funsch, CPA, principal and director of professional standards, Rehmann
- Nora Kilaghbian, vice president, Capital Group (retired)
- Carole McNees, CPA, partner, Plante Moran
- Christine Quintana, CPA, partner, Ernst & Young LLP
- G. Alan Skinner, CPA, partner and assurance service line leader, Carr, Riggs & Ingram LLC
- Daniel Trujillo, CPA, CGMA, managing partner, TKM, LLC
AICPA Seeks Feedback on 2026-30 Strategic Priorities for Standard-Setting Panel
The AICPA announced that its Auditing Standards Board (ASB) is seeking comment on its proposed strategic plan for 2026-30. Beyond the forward-looking strategic plan, the ASB continues to move ahead with its 2025 work plan. Comments on the 2026-2030 strategic plan proposal are due by June 13, 2025, and can be made by completing a related survey. Alternatively, comments can be sent directly to commentletters@aicpa-cima.com.
AICPA Committee Approves Clarification to Standard Related to Financial Statement Preparation as Part of a Client Advisory Services (CAS) Engagement
The AICPA Accounting and Review Services Committee clarified the applicability of the standard related to financial statement preparation as part of a CAS engagement. The newly issued Statement on Standards for Accounting and Review Services No. 27, Applicability of AR-C Section 70 to Financial Statements Prepared as Part of a Consulting Services Engagement, clarifies that a CPA is not required to apply AR-C Section 70, Preparation of Financial Statements, when the preparation of financial statements is not the primary objective of an engagement that is performed in accordance with CS section 100, Consulting Services: Definitions and Standards.
March 2025 International Accountant Standards Board (IASB) Board Agenda and Meeting Papers Now Available
The International Financial Reporting Standards (IFRS) Foundation announced that the agenda, papers and meeting summary of the March 2025 IASB meeting are now available. The latest episode of the IASB podcast is also available here.
IASB Begins Work on its Next Agenda Consultation
The IFRS Foundation announced that the IASB on March 18 discussed its approach to its next agenda consultation, which will shape its technical strategy and work plan from 2027. The IASB expects to publish its formal consultation document through a request for information in the fourth quarter of 2025.
April 2025 IASB Agenda and Meeting Papers Now Available
The IFRS Foundation announced that the agenda and papers related to the April 2025 IASB meeting are now available. Agenda items include:
- Consistent application activities
- Climate-related and Other Uncertainties in the Financial Statements
- Business Combinations—Disclosures, Goodwill and Impairment
IAASB Releases Comprehensive Implementation Guide for the ISA for LCE
The IAASB released a new first-time implementation guide for the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities, or the ISA for LCE—the standalone global auditing standard designed specifically for audits of financial statements of smaller and less complex entities (LCE).
International Ethics Standards Board for Accountants (IESBA) Launches Public Consultation on Auditor Independence for Audits of Collective Investment Vehicles and Pension Funds
The IESBA issued a consultation paper seeking feedback on whether revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the “Code”) are necessary to address the independence of auditors when they carry out audits of collective investment vehicles and pension funds (collectively referred to as “Investment Schemes” or “Schemes”).
Stakeholders are invited to submit their comments electronically through the IESBA website by June 30, 2025.
The IFRS Foundation Monitoring Board Reaffirmed the Importance of Oversight of the Standard-Setting Activities and Governance by the IFRS Foundation Trustees
The International Organization of Securities Commissions (IOSCO) announced that during the meeting of the IFRS Foundation Monitoring Board in London in early March, the Monitoring Board emphasized continued focus on high quality IFRS Accounting Standards. The Monitoring Board reaffirmed the importance of promoting consistency, comparability, and interoperability of sustainability disclosures in relevant capital markets through work across jurisdictions.
IOSCO Unveils Work Program for 2025
The IOSCO announced its Work Program for 2025, outlining key priorities to enhance financial resilience, market effectiveness, and investor protection in global markets.
Roundtable Invitation: SME Market Study
The Financial Reporting Council (FRC) invited stakeholders to take part in roundtables throughout the consultation period of its small and medium-sized enterprises (SME) market study. The FRC launched its market study to examine how effectively the audit market serves SMEs and any burdens arising from accounting and audit standards, as well as challenges faced by auditors when auditing SMEs. The first roundtable took place on March 13 for SMEs and their advisers, with more roundtables taking place across March and April. Further details of the SME market study and its consultation, which closes on April 25, 2025, can be found on the SME market study webpage.
International Forum of Independent Audit Regulators (IFIAR) Releases 2024 Report on Annual Survey of Audit Inspection Findings
The IFIAR released its 13th annual survey of inspection findings arising from its Member regulators’ individual inspections of audit firms affiliated with the six largest global audit firm networks.
IFIAR Releases 2025 Report on the Use of Technology in Audits
The IFIAR released its 2025 report on the “use of technology in audits – observations, risks and further evolution.”
Strengthening Fraud Deterrence and Detection: Key Insights from the AFC Fraud Forum
The CAQ published a blog post written by Lucy Wang, CFE, Director, Anti-Fraud Initiatives at the CAQ, about the Anti-Fraud Collaboration’s inaugural Fraud Forum. Wang shares her takeaways from the event, including the evolving fraud risk landscape, the human element of fraud prevention, strengthening fraud detection and response, and the road ahead.
The Evolving Role of Audit Committees in 2025 and Beyond
The CAQ published an article written by Vanessa Teitelbaum, CPA, senior director on the Professional Practice team at the CAQ, about the growing responsibilities of audit committees, which are the focus of the 2025 Audit Committee Practices Report, a collaboration between the CAQ and Deloitte’s Center for Board Effectiveness. Teitelbaum shares her main takeaways from this year’s report, including the top priorities for audit committees, a spotlight on cybersecurity, why enterprise risk management is important, the importance of finance and internal audit talent, key insights on audit committee practices and effectiveness, and the role of the independent auditor.
The Future of Work: Enhancing Corporate Culture to Deter and Detect Fraud
The CAQ published a blog post written by Lucy Wang, CFE, Director, Anti-Fraud Initiatives at the CAQ, about The Impact of a Changing Work Environment on Corporate Culture, the latest resource from the Anti-Fraud Collaboration, which is a partner of the CAQ. Wang shares her takeaways from the report regarding adapting corporate culture in a changing work environment, reinforcing ethical culture in a hybrid work environment, how changes in work environment impact fraud risks, and fraud prevention through culture and risk management.
Comment Letter on CARB: Information Solicitation to Inform Implementation of California Climate-Disclosure Legislation: Senate Bills 253 and 261, as amended by SB 219
The CAQ posted a comment letter that shares its views related to the California Air Resources Board (CARB) Information Solicitation to Inform Implementation of California Climate-Disclosure Legislation: Senate Bills 253 and 261, as amended by SB 219. The letter provides insight into the following key elements that the CARB should incorporate into the regulation as the assurance requirements are drafted:
- Recognized reporting standards should be specified to enable assurance
- Acceptable assurance standards should be specified
- Levels of assurance should be specified
- Minimum requirements for assurance providers should be specified
- The importance of oversight of assurance providers
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).