Q4 2025 SEC Regulatory and Reporting Updates
The fourth quarter of 2025 capped a year of transition and a clear shift in regulatory philosophy under SEC Chairman Paul Atkins.
Beginning with a record-setting government shutdown, the quarter ended with leaders from the SEC, FASB, and PCAOB sharing important insights on their priorities moving into the new year at the 2025 AICPA & CIMA Conference on Current SEC and PCAOB Developments. Learn more about these insights and how it will impact public companies below.
What’s Happening at the SEC?
The SEC’s regulatory priorities under Chairman Atkins continued to take shape in Q4 amidst a dynamic economic and political landscape.
Most of the SEC staff was furloughed during the 43-day government shutdown that began on October 1, slowing the Commission’s work. At the conference, James Moloney, the Director of the Division of Corporation Finance (Corp Fin), said the Commission received approximately 1,000 registration statements during the shutdown that the staff is reviewing on a first-in, first-out basis while prioritizing IPOs. Corp Fin staff also published guidance to help answer common questions related to pending filings with the Commission. The staff will likely work through most of their backlog early in 2026, but there may be lingering effects that companies should keep in mind.
On November 17th, Corp Fin also released a statement that due to resource considerations, it generally won’t respond to no-action requests when a company plans to exclude shareholder proposals under Rule 14a-8. This action generally gives public companies greater autonomy in deciding whether to exclude shareholder proposals.
Regulatory Priorities
In Chairman Atkins keynote remarks at the conference, he once again highlighted his desire to make IPOs great again by removing unnecessary pain points that come along with being a public company. Some of the areas he noted as priorities moving forward include:
- Rationalizing disclosures. Reducing disclosure overload by streamlining risk factors and executive compensation disclosures to be based on materiality.
- Litigation risk. Reducing meritless lawsuits by not rejecting mandatory arbitration and fee-shifting provisions in bylaws when otherwise permitted.
- Corporate governance. Changing shareholder proposal rules to de-politicize shareholder meetings.
The Chairman also emphasized the importance of bringing clarity to crypto regulation and moving away from a regulation by enforcement approach, which has been a long-standing priority of his administration. Atkins also highlighted the importance of auditor independence and the SEC’s oversight of the Public Company Accounting Oversight Board (PCAOB).
Financial Reporting
Artificial Intelligence
The rise of AI and its impact on financial reporting was a central theme of the conference. Members of the Office of the Chief Accountant explained their office is focused on understanding how AI is being used by companies and evaluating related financial reporting risks and their impact on internal control.
Filer Status and SRC Eligibility
Earlier in 2025, the SEC published a new Compliance and Disclosure Interpretation (CD&I) describing when a company that loses smaller reporting company (SRC) status transitions to being an accelerated filer.
At the conference, Corp Fin staff highlighted that, as described in C&DI 130.05, a company will continue to be considered a non-accelerated filer for filings due in a subsequent calendar year if it no longer qualifies as an SRC under the revenue test that is determined as of the last business day of a company’s second quarter. The staff also clarified the C&DI doesn’t apply to companies that only qualified for SRC status based on the public float test.
Semiannual Reporting
While not a focus of the conference, commissioners and other SEC staff have noted that the Commission is likely to propose rules to eliminate required quarterly reporting in favor of semiannual reporting, an idea that President Trump expressed support for earlier in 2025.
This idea has gained a lot of traction over the last few months and would be a significant change for public companies. Expect to see more movement on this topic in 2026.
Leadership Changes
Former Commissioner Caroline Crenshaw left the SEC on January 2, 2026. Her original term ended in June of 2024, but she was permitted to serve for an additional 18 months in accordance with SEC rules. After her departure, there will only be three remaining commissioners with two commissioner roles vacant.
Another change of note is that Cicely LaMothe, the former Deputy Director of Corp Fin, retired in late December of 2025.
How Do These Changes Affect Auditors?
Following Chairman Atkins remarks on PCAOB oversight at the conference, Chief Accountant Kurt Hohl described his views on whether PCAOB’s inspection program should focus more of its efforts on reviewing audit firms’ systems of quality control (QC), rather than reviews of individual audit files.
Some stakeholders believe this would be a more efficient and effective approach to audit regulation. Hohl noted that moving the focus of the inspection to firm-level QC may hold firm leadership more accountable than the current approach, which is more focused on individual audit teams.
Rethinking the role of the PCAOB and the execution of its mission has been a hot topic under the new SEC administration. In 2026, expect to see a slate of new board members appointed to the PCAOB, including a new chair. It will be interesting to watch how the PCAOB evolves under new leadership and how those changes impact auditors and public companies alike.
What Should Public Companies Focus on Related to Financial Reporting?
Segments
For companies with a single reportable segment, ASU 2023-07 allows for companies to cross-reference certain required segment disclosures to the face of the financial statements. At the conference, Corp Fin staff noted that such a cross-reference might not be adequate to cover all the required segment disclosures.
For example, required disclosures about the chief operating decision maker (CODM) and how the CODM uses the segment measure of profit or loss, among others, would likely not be addressed elsewhere in the financial statements. Single reportable segment companies should make sure all the required segment disclosures are made, as this appears to be a focus area of the staff.
Corp Fin staff also emphasized that when the CODM uses multiple measures of segment profit or loss, the measure that is most consistent with US GAAP is required to be disclosed. As an example, the staff observed that if a CODM uses both EBITDA and adjusted-EBITDA metrics, EBITDA would be the required measure because adjusted-EBITDA includes additional adjustments that move the measure farther away from US GAAP.
The staff also highlighted that if significant expense information isn’t required to be disclosed for a particular reportable segment, companies still need to disclose the nature of the expense information used by the CODM to manage operations.
Income Taxes
ASU 2023-09 is effective for the 2025 annual financial statements of calendar year-end companies. The standard requires more disaggregated information to be included in the rate reconciliation and more jurisdictional information about income taxes paid. As companies make these disclosures for the first time in 2026, pay special attention to whether any new controls should be implemented over the completeness and accuracy of the newly required information.
We’re Here to Help
If you have questions about the changes happening at the SEC or other regulatory and financial reporting changes, contact your firm professional.