What Public Companies and Auditors Need to Know About Recent SEC and PCAOB Updates

This article was updated on February 9, 2026, to reflect recent regulatory developments.

Regulatory priorities are shifting in ways that directly affect how public companies prepare disclosures, manage audits and apply professional judgment. Recent updates from the SEC and PCAOB signal a clear focus on improving the relevance of information provided to investors while reinforcing expectations around audit quality, independence and accountability. For companies and auditors alike, the message is consistent: simplify where possible, be precise where it matters and maintain discipline as standards and oversight continue to evolve.

Taken together, these updates offer important insight into where regulators are heading and what they expect from issuers, audit committees and audit firms in the near term. From renewed attention on disclosure quality and non-GAAP measures to ongoing scrutiny of audit execution and the responsible use of emerging technologies, the themes emerging from recent SEC and PCAOB discussions provide a useful road map for areas that may draw increased focus in filings, audits and regulatory reviews.

SEC Priorities

Streamlining disclosures without losing investor value

Chairman Paul Atkins and Chief Accountant Kurt Hohl outlined an investor-focused agenda aimed at simplifying regulations and improving disclosure relevance.

Key initiatives include:

• Disclosure rationalization: The SEC plans to reduce the cost and volume of disclosures, with particular focus on risk factors and executive compensation. Larger projects will be broken into smaller proposals beginning in 2026.
• Corporate governance reforms: Efforts are underway to curb securities litigation and depoliticize shareholder processes while maintaining appropriate investor protections.
• Clearer crypto guidance: The SEC signaled a move away from regulation by enforcement toward clearer rules, including coordination with FASB on crypto accounting standards.
• Audit oversight modernization: Discussion included potential PCAOB alignment with firm-level quality management systems under ISQM 1, modernizing interim auditing standards and increasing global convergence.

FASB Updates

Standards that will affect implementation planning

FASB shared updates on several finalized and emerging standards that may affect financial reporting timelines and resource planning, including digital assets, equity classification refinements and post-implementation reviews (e.g., leasing, CECL).

Notable developments include:

• Internal-use software: Updated guidance modernizes development models and introduces more flexible, PP&E-style disclosures.
• Environmental credit programs: New guidance addresses recognition, measurement and disclosure.
• Current Expected Credit Losses (CECL) refinements: Updates include purchased seasoned loans guidance and practical expedients for short-term receivables.
• Government grants: The first authoritative U.S. GAAP guidance is included for business entities receiving grants.
• Derivative scope and hedge accounting improvements: Clarifications address operational contracts and LIBOR-related challenges.

PCAOB Outlook

Reshaping the board and budget to refocus oversight

On January 30, 2026, the SEC announced a sweeping change in the leadership of the Public Company Accounting Oversight Board (PCAOB). The commission announced four new members to the board, including a new chairman. This follows the SEC’s decision in mid-2025 to seek new leadership amid a push to align the board’s resources and compensation with its public-service mission. While the focus will remain on audit quality, this change appears to be in line with recent administrations directives and follows the July 2025 resignation of the former chair of the PCAOB at the request of SEC chair, Paul Atkins. Mr. Atkins stated that “I am confident that this new Board will usher in a new day at the PCAOB—one of sensible, efficient oversight of auditors.”

Key considerations for companies and auditors

• Lean operations: The SEC-approved 2026 budget for the PCAOB trims funding by 9.4% from the prior year and reduces board pay substantially. As the board realigns its resources, issuers and auditors should anticipate greater emphasis on cost-effective inspection and standard-setting, along with careful prioritization of initiatives.
• Regulatory recalibration: SEC leaders have signaled that the revamped board’s mandate is to provide “sensible, efficient oversight” of auditors. This could lead to a moderated rulemaking agenda, with a focus on clear and principles-based standards that balance investor protection with regulatory efficiency.
• Continued investor protection: The PCAOB’s core statutory mission has not changed. The board remains responsible for overseeing public company audits to protect investors and enhance the reliability of financial reporting. Independence, professional judgement and strong internal controls thus continue to be paramount for public companies and audit firms.
• Stakeholder engagement: The leadership transition offers an opportunity for companies and auditors to engage early in discussions about evolving inspection priorities and potential revisions to standards. Monitoring board developments can help organizations stay ahead of regulatory changes.

While this may signal changes ahead, the new board has not yet announced its specific areas of focus or initiatives, and it will likely take an inspection cycle or two before any meaningful changes are felt in audits subject to PCAOB oversight as auditor firms are able to see the boards initiatives and focus play out during inspections.

AI in auditing

Use with discipline, not dependence: AI is reshaping the profession, with widespread adoption of GenAI by firms and issuers. PCAOB Chair Botic emphasized maintaining professional judgment and skepticism, warning against overreliance on technology that could erode critical thinking and independence.

SEC Division of Corporate Finance focus areas to watch

SEC staff highlighted several recurring disclosure issues, including:

• Segment reporting: Heightened scrutiny following ASU 2023-07, with emphasis on clear, entity-specific explanations
• Non-GAAP measures: Continued zero tolerance for misleading or poorly reconciled metrics
• Financial statement presentation: Common issues include improper netting in cash flow statements and incomplete income statement classifications under Regulation S-X.
• Predecessor financials: Increasing complexity in spinoffs and intellectual property transactions, requiring fact-specific analysis

What Public Companies and Audit Committees Should Do Now

As regulatory expectations continue to evolve, public companies and audit committees should take a fresh look at how these priorities translate into day-to-day practices. This includes reassessing disclosures to confirm they are clear, company-specific and focused on information investors actually use, rather than relying on boilerplate language. Organizations should also evaluate their readiness for recently issued and emerging accounting standards, particularly where implementation may affect systems, controls or internal coordination across finance, IT and operations.

At the same time, audit committees and management teams should remain focused on audit quality fundamentals, including independence, professional judgment and effective oversight of complex or high-risk areas. As technology and AI tools become more embedded in financial reporting, it will be important to establish appropriate governance, documentation and controls around their use. Maintaining a balanced approach — one that leverages technology while reinforcing accountability and skepticism — will help organizations respond confidently to regulatory scrutiny and evolving expectations.

Weaver helps public companies, audit committees and finance teams interpret regulatory developments and apply them in a practical, defensible way. If you have questions about how these updates may affect your organization, contact us to start a conversation.

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