This is an extract from the March edition of the Center for Audit Quality’s Audit Committee Insights newsletter series. Read the full edition of this month’s newsletter here. Subscribe to this newsletter series for monthly updates and resources for audit committee members.
Regulators and standard setters’ current priorities should be top of mind for audit committees as they develop future agendas. EY’s SEC Top Priorities outlines several areas where significant action is expected in 2026—and the implications for audit committees are worth a close read.
Capital Formation
This year, the SEC is working to reduce barriers for companies going public by easing disclosure burdens, litigation risk and governance pressure. Expected actions include amendments to emerging growth company and filer status requirements, Rule 144 safe harbor, and shelf registration modernization. The SEC is also exploring ways to expand access to capital markets for private businesses and smaller public companies, including broader retail investor access to private markets.
For audit committees, this shift may affect how the company approaches IPO readiness, filer classification and the scope of required ICFR attestation under SOX 404(b).
Disclosures Outlook
The SEC is expected to reduce disclosure requirements using materiality as a guiding framework, with potential changes to periodic reporting requirements on the table. Audit committees should ensure that management’s disclosure controls align with these trends, paying particular attention to leading SEC comment letter themes around non-GAAP measures, MD&A clarity, segment reporting and revenue recognition.
The CAQ’s most recent Audit Committee Transparency Barometer revealed a stagnation in key disclosure areas. This year, audit committees should continue to enhance transparency about their evolving oversight responsibilities to instill confidence in evolving disclosures.
Shareholder Proposals, Proxy Advisors and Litigation
Organizations can expect movement to modernize shareholder proposal rules, including allowing certain proposals to be excluded from proxy statements. SEC Chairman Atkins has signaled plans to address what he views as an outsized influence of proxy advisors on management decisions. The recently issued Compliance and Disclosure Interpretations clarified the scope of shareholder activities, changes that are anticipated to significantly impact how investors engage with public companies.
This movement highlights that formal company disclosures have become more important, as other channels for shareholder outreach may narrow. Audit committees should factor these dynamics into their proxy disclosure review process this season.
Crypto Assets
As the crypto landscape evolves, the SEC is working toward a clear regulatory framework for the issuance, custody and trading of crypto assets—including conditional relief for crypto projects while rules are still being developed. In January 2026, the SEC issued joint guidance providing clarity on the application of federal securities laws to tokenized securities, establishing a taxonomy that distinguishes between securities tokenized by the issuer versus those tokenized by unaffiliated third parties.
The audit committee has a responsibility to ensure the company has a robust digital asset strategy, that the committee has the appropriate expertise to understand this activity, and to oversee the strategy around new digital asset-related activity. The CAQ’s Role of the Auditor in Digital Assets is a helpful resource, exploring how public company auditors are adapting, including considerations and opportunities for boards to enhance transparency.
The Future of Enforcement
These priorities signal a shift away from regulation by enforcement, with focus redirected toward fraud, market manipulation and direct investor harm. For audit committees, this makes robust fraud oversight a continued priority even as the overall enforcement posture shifts.
These developments have tangible implications for how audit committees approach oversight, disclosure review, and risk monitoring in the year ahead. For additional information, explore recent publications from KPMG and Deloitte for further perspectives on the board governance landscape in 2026.
