Executive Overview

The three-day conference in Washington, DC, in December 2025 brought together AICPA, SEC, FASB, and PCAOB leaders alongside market practitioners to discuss priorities for US capital markets, standard-setting, audit oversight, and emerging topics such as AI, complex capital projects, and shareholder activism. Consistent themes included streamlining disclosures to revitalize public markets, elevating audit quality, and maintaining independence in light of AI and evolving firm structures.

At the conference, former FASB board member and current A&M Senior Advisor Marc Siegel moderated a session discussing how shareholder activism is shaping financial reporting and the CFO agenda. A&M Managing Director Jason Frankl served as a panelist, delivering practical, board level insights on shareholder activism emphasizing preparedness, engagement strategy, and disclosure judgment. Frankl highlighted real world tactics for stress testing vulnerabilities, scenario planning including M&A or divestitures, and coordinating with advisors to execute credible, fact driven responses that protect value and maintain market confidence.

In this article we distill the most relevant takeaways for CFOs, controllers, CAOs, audit committees, and finance transformation leaders, and outline how A&M can help you act on them.

Day 1 — SEC Priorities, Audit Independence, and Activism Readiness  

• Revitalizing US Public Markets: SEC Chair Paul Atkins highlighted the concerning persistent decline in US listed companies. He noted there are currently 50% fewer public companies than there were 30 years ago. He outlined a reform agenda to curb this decline focusing on rationalizing disclosures (e.g., risk factors and compensation disclosures), curbing meritless securities litigation (including openness to IPOs by companies with mandatory arbitration included in their bylaws), and recalibrating and aligning governance rules toward the long-term investor. He also committed to clear “rules of the road” for digital assets. He emphasized that crypto oversight would pivot from regulation-by-enforcement to rulemaking in coordination with the CFTC and Congress.  
• Independence and Firm Structures: The SEC is closely monitoring alternative practice structures and private equity investment in audit firms, reinforcing the importance of independence, objectivity, and professional skepticism. The SEC is encouraging PCAOB inspections to place greater emphasis on firm-level systems of quality control, rather than just engagement-level findings.
• International Coordination and IFRS/ISSB Oversight: The SEC chief accountant underscored the importance of high-quality international accounting and auditing standards and noted that the SEC is monitoring the International Financial Reporting Standards (IFRS) Foundation’s governance and funding. He expressed concerns about a current funding imbalance in the international standard-setting regime, specifically, the level of funding being directed to the International Sustainability Standards Board (ISSB) (focused on developing sustainability reporting) relative to the IASB, which may ultimately put at risk the objectivity and quality standard developed by the International Accounting Standards Board (IASB) (focused on developing accounting rules). He shared that this is a significant issue as approximately $14 trillion of market capitalization is represented by foreign filers currently utilizing the US market, and 75% of those SEC filers are utilizing IFRS.
• Activism Readiness: Recommendations for finance leaders included aligning KPI and non-GAAP policies with the segment framework under ASC 280, maintaining an activist-resistant narrative discipline, and preemptively stress-testing disclosures against likely activist critiques. The discussion also emphasized the importance of preparedness across governance, finance, and IR, and how companies can align their communications and SEC filing disclosures with evolving investor expectations while navigating regulatory scrutiny.

Day 2 —SEC Reporting Reminders, PCAOB, AI, and Emerging Topics

SEC Reporting Reminders:

• Financial Reporting Manual (FRM) Updated: The FRM remains a key resource reflecting SEC staff interpretive views and practice updates. The SEC staff shared that several sections of the manual have recently been updated and noted that the manual is an excellent resource for gathering SEC views on topics.
• Segment Reporting (ASU 2023-07): Even single segment filers must include the required ASC 280 disclosures rather than relying solely on cross-references. SEC staff advised that registrants should clearly identify the CODM, explain how the measures are used, and avoid pseudo-consolidations or non-GAAP subtotals embedded in segment disclosures.
• Non-GAAP Measures: A non-GAAP measure can be considered misleading even if used by management or investors. The staff encouraged registrants to consult in advance about controversial measures as they can provide helpful context to aid registrants in their decision-making.

PCAOB Leadership Themes:

• Audit Quality Indicators Are Improving: Preliminary 2025 inspection data is indicating fewer Part I.A deficiencies. Inspectors will continue to focus on independence, understanding the business, skepticism, adequacy of time and resources, and clear CAMs.
• QC 1000 Effective Date: The PCAOB’s quality control standard QC 1000, A Firm’s System of Quality Control, takes effect on December 15, 2026 (deferred one year). Firms should plan now for system-level readiness and understand the differences from previous quality control guidance. Firms are urged to pilot aspects of QC 1000 ahead of the effective date to de-risk implementation.

AI Insights:

• Governance and Controls: The SEC reinforced the need for robust AI governance through documentation of model design and data, and ongoing human oversight. Auditors should adjust risk assessments, Information Technology General Control (ITGC) approaches, and monitoring to address AI-specific risks.
• Audit Transformation and Risk: AI can enhance audit efficiency and analytics, but it heightens the need for professional skepticism and vigilance regarding emerging frauds that are perpetuated or aided through AI technologies. The use of AI will not eliminate the importance of gathering complete and accurate (C&A) information.

Emerging Technical Topics From OCA:

• Private Credit: Staff shared perspectives on private credit valuation under ASC 820, with an emphasis on Level 3 calibration and market participant assumptions.
• Stablecoin Accounting: OCA highlighted that accounting for digital assets is complex, and standard setting is continuing to develop. OCA described the specific facts and circumstances of a recent consultation where it did not object to stablecoin being classified as a cash equivalent.  

Day 3 — Complex Transactions, Tariffs, DISE Readiness, and Enforcement Direction

Complex Transactions:

• AI Data Centers: Reporting complexities can span VIE consolidation analyses, lease identification, construction-period controls, residual interests, guarantees, and frequent reassessments of useful lives and impairment indicators given rapid technological changes.

Tariffs:

• Regulatory Shifts: SEC staff emphasized MD&A transparency regarding tariff impacts and reminded registrants to quantify material effects on cash flows, construction costs, and impairment assessments. Companies should monitor post period regulatory or judicial developments (e.g., the ultimate Supreme Court decision) and assess financial reporting implications, including disclosure, where refunds or reversals could be material.

Disaggregation of Income Statement Expenses:

• DISE: Public business entities will face new, granular footnote disclosures for specified expense categories beginning with annual periods after December 15, 2025. Attendees were urged not to underestimate the lead time required to redesign processes, systems, and controls to capture consistent, audit ready data.

SEC Enforcement Posture:

• Improved Efficiency: Expect an emphasis on faster resolution of minor “foot faults.”
• Significant Matters: Greater focus on significant departures from GAAP and company policies.
• Individual Accountability (Fraud): Increased focused on individual accountability in matters involving theft and misappropriation of assets.
• Errors (Complex Financial Reporting Matters and Judgments): Errors involving complex accounting or difficult judgments these days rarely involve a single individual. Expect the SEC to be interested in gathering a holistic understanding of each participant’s contributions, including intent (not overly focused on a couple of poorly worded emails by a single individual), the control environment, the individuals assigned responsibilities, and the actions (or omissions) of all parties involved before making individual accountability determinations.
• SEC Staffing: SEC staff activity slowed amid significant turnover in the second half of 2025, but panelists shared that it is expected to normalize this next year. 

Important Considerations for Board Members and Those Charged With Governance

Additional Benefits Ascribed to Investigations and SEC Self-Reporting

Notably absent from this year’s conference was a substantive discussion of whistleblower activity, despite its pivotal role in SEC enforcement and its growing importance to DOJ enforcement following the launch of the DOJ’s whistleblower pilot program. In 2025, the DOJ also issued extensive guidance outlining substantial benefits for entities that proactively investigate, self-report, and remediate—an approach that is both practical and sound, as conducting a thorough, merits-based investigation and, if warranted, taking appropriate remedial actions demonstrates to the DOJ that the governance process is functioning effectively. Moreover, a well-defined, high-quality investigation protocol helps prevent misuse of the whistleblower line by signaling to employees that allegations will be rigorously evaluated based on the underlying facts and circumstances, thereby deterring future employee misconduct.

New 2025 DOJ Guidance – Incentives for Self-Reporting and Appropriate Investigative Response

In May 2025, the DOJ Criminal Division issued the memorandum “Focus, Fairness, and Efficiency in the Fight Against White Collar Crime,” reinforcing the Department’s commitment to transparency and recognizing companies that self-report, fully cooperate, and remediate.

The DOJ directed revisions to the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy to clarify the significant benefits available to entities that self-disclose and to emphasize that not all corporate misconduct warrants criminal prosecution. The DOJ’s new framework provides meaningful incentives for companies that promptly disclose to regulators, conduct thorough investigations, and implement appropriate remedial measures.

Background on SEC and DOJ Whistleblower/Tip Lines

The DOJ Criminal Division’s whistleblower pilot program began in August 2024 and was expanded in May 2025 to include additional areas of corporate misconduct, such as sanctions offenses and trade, tariff, customs, and procurement fraud.

The SEC’s whistleblower program, operational since 2011, is a significant source of enforcement leads. The SEC most recently reported in its annual report to Congress that it received approximately 25,000 and 18,000 tips in 2024 and 2023, respectively (Annual Report to Congress, November 15, 2024). SEC regulations require registrants to maintain audit committee procedures that provide an anonymous, confidential mechanism for employees to report accounting and auditing concerns. A whistleblower hotline is the most common way to comply.

Common Board/Audit Committee Response and Best Practices

Upon receiving a significant allegation (including those from whistleblower hotlines), boards of directors commonly initiate a privileged internal investigation by engaging external counsel and specialized forensic accounting resources to assess the merits, including any financial reporting implications. Whistleblowers frequently submit allegations through multiple channels—company hotlines, the SEC, and, increasingly, the DOJ.

In many situations, boards (through counsel) notify the SEC of the allegation and initiate an independent investigation, including the retention of a qualified forensic accounting firm with experience reporting such investigations to the SEC and/or DOJ. This demonstrates effective governance and often prompts the SEC to defer opening an inquiry pending the board’s findings and a plan to implement remedial measures, if necessary.

How A&M Can Help

A&M is a professional services firm with over 12,000 employees. Our teams bring deep industry expertise that differentiates us from competitors.

A&M provides financial statement preparers with a full suite of services, including technical accounting and reporting, audit readiness, transactional support (IPO readiness, spin-offs, carveouts, and more), tax and provision reporting, valuation, and shareholder activism services.

In addition, A&M’s investigations and compliance professionals conduct and support whistleblower investigations and related governance and compliance matters in close coordination with outside counsel, boards of directors, and special committees. We bring the market’s top-tier forensic accounting practice—combining highly experienced forensic accountants, technical accounting specialists, advanced technologies, data specialists, and former regulators (including a former FASB board member and a member of international standard setting board)—operating on a truly global platform and leveraging advanced forensic tools and analytics to meet the SEC and DOJ expectations.

Call to Action

If you are preparing year-end disclosures, assessing DISE readiness, engaging in complex AI/data center arrangements, pursuing capital markets activity, or anticipating or preparing for activist scrutiny, contact A&M. We will accelerate your readiness plan, define clear actions and solutions, and support your interactions with auditors and regulators. In addition, we are a trusted resource for conducting investigations and forensic accounting services.