February 2026 Financial Reporting, Governance, and Risk Management

Message from Sydney Garmong, Partner, National Office

We hope your financial reporting season is progressing as planned.

As mentioned last month, we had a flurry of activity from the Financial Accounting Standards Board and bank regulators in late 2025, so I am delighted to report that February (so far) has been relatively quiet. The federal banking agencies have a few releases, primarily focusing on rightsizing regulation. The National Credit Union Administration issued a third and fourth round of proposals as part of its Deregulation Project.

In case you missed it, we issued our “Annual Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) Update for Public Companies,” on Feb. 4, 2026. In addition to updates from the SEC and PCAOB, we cover the 2024 American Institute of CPAs (AICPA) Conference on Current SEC and PCAOB Developments, recap developments from the Center for Audit Quality (CAQ), and provide an appendix of key dates for select SEC rulemaking.

For those interested in the digital asset world, on Jan. 27, 2026, the CAQ issued “The Role of the Auditor in Digital Assets: Present and Future,” which examines the rapidly evolving digital asset ecosystem. On Jan. 12, 2026, the AICPA announced updates to its stablecoin reporting framework to include a new section focused on controls over token operations.

Auditing professionals might also be interested in “2026 Audit Profession Outlook” by Julie Bell Lindsay, CEO of the CAQ. The outlook, released on Feb. 4, 2026, reflects on the current state and future direction of the public company audit profession in a post-disruption environment.

We wish you well during this financial reporting season and look forward to keeping you informed.

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From the federal financial institution regulators

Federal banking agencies focus on supervisory appeals

On Jan. 22, 2026, the Federal Deposit Insurance Corp. (FDIC) board of directors approved amendments to its “Guidelines for Appeals of Material Supervisory Determinations” to replace the Supervision Appeals Review Committee with a new stand-alone Office of Supervisory Appeals. The change is intended to strengthen independence and consistency in how supervisory appeals are reviewed and decided. In addition, on Feb. 17, 2026, the Office of the comptroller of the Currency (OCC) requested comments on revised policies and procedures for national bank appeals of material supervisory determinations. Institutions with ongoing or potential appeals should monitor implementation details as new appeals policies and procedures become operational.

FDIC finalizes amendments to official signs and advertising rules

On Jan. 22, 2026, the FDIC approved a final rule amending requirements for official signs and advertising statements related to FDIC insurance, with a focus on digital delivery channels. The rule provides greater flexibility in the design and placement of the FDIC digital sign and narrows when nondeposit disclosures must be displayed, particularly for digital platforms and ATMs. The rule becomes effective 30 days after Federal Register publication, with a compliance date of April 1, 2027.

OCC highlights resolution planning considerations

On Jan. 16, 2026, Comptroller of the Currency Jonathan V. Gould delivered remarks discussing the role and future of resolution planning requirements for large banks. He encouraged renewed dialogue on how resolution planning expectations can be calibrated while still supporting financial stability and orderly resolution outcomes. Although no regulatory changes were announced, the remarks signal continued policy focus on resolution planning frameworks.

Fed finalizes 2026 stress-test scenarios

On Feb. 4, 2026, the Federal Reserve Board (Fed) finalized the hypothetical scenarios for its 2026 supervisory stress tests and elected to maintain current stress-test-related capital requirements until 2027 while public feedback is considered. The scenarios include a severe global recession and stress across commercial real estate, residential real estate, and corporate debt markets.

NCUA advances new round of delegation proposals

On Jan. 27, 2026, and previously on Jan. 13, 2026, the National Credit Union Administration (NCUA) announced a fourth and third set of proposed regulatory changes under its ongoing Deregulation Project. The proposals are intended to reduce unnecessary burden and clarify existing requirements, with potential impacts on operational, reporting, and governance practices.

NCUA issues 2026 supervisory priorities

On Jan. 14, 2026, the NCUA issued its supervisory priorities letter for 2026, outlining areas of examination focus for federally insured credit unions. The letter emphasizes a risk-focused approach and reiterates the agency’s commitment to avoiding “regulation by enforcement.” The letter also highlights the agency’s focus on balance sheet management and lending, operational and compliance risks, and efficiency and innovation.

From the Securities and Exchange Commission (SEC)

SEC chair testifies before House and Senate committees

On Feb. 11, 2026, Chair Paul Atkins testified before the U.S. House Financial Services Committee, outlining the commission’s focus on its core mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation. Atkins noted the decline in the number of U.S. public companies over recent decades and addressed efforts to streamline disclosure requirements and reduce regulatory costs that he said ultimately affect everyday Americans, including through public company compliance expenses and oversight costs. He also addressed review of the Consolidated Audit Trail, approval of the Public Company Accounting Oversight Board (PCAOB) 2026 budget, support for digital asset market structure legislation, and recent enforcement priorities, including actions involving fraud, insider trading, accounting misconduct, and cross-border market manipulation. On Feb. 12, 2026, Atkins testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, building on many of the topics covered in his House testimony.

SEC commissioner addresses Regulation S-K and public company disclosure framework

In Jan. 26, 2026, remarks at the annual Securities Regulation Institute, Commissioner Mark Uyeda said Regulation S-K is a key pillar of the public company disclosure framework. He highlighted potential areas to streamline Regulation S-K, including revisiting insider trading policy disclosures under Item 408, adjusting the de minimis threshold for related-party transactions under Item 404, simplifying cybersecurity disclosures under Item 106, reevaluating disclosure requirements related to unregistered securities under Item 701, and simplifying disclosures related to the number of security holders and performance graphs under Item 201. Uyeda also noted the role of scaled disclosure regimes, including emerging growth company and smaller reporting company thresholds, and emphasized a renewed focus on financial materiality when developing SEC disclosure requirements.

Atkins provided additional views on SEC disclosure reform during his remarks on Feb. 17, 2026, at the Texas A&M School of Law Corporate Law Symposium.

SEC appoints new PCAOB chair and board members

On Jan. 30, 2026, the SEC announced the appointment of Demetrios (Jim) Logothetis as chair of the PCAOB. Logothetis spent more than 40 years in public accounting, including in senior leadership roles, and currently serves on the board of the Republic Bank of Chicago, where he chairs the audit committee. The SEC also appointed Mark Calabria, Kyle Hauptman, and Steven Laughton as PCAOB board members. Logothetis, Calabria, and Laughton were sworn in on Feb. 10, 2026.

In a statement issued in connection with the appointments, Atkins stated, “I am confident that this new Board will usher in a new day at the PCAOB – one of sensible, efficient oversight of auditors.” Atkins said that the new board will refocus on the PCAOB’s core statutory mission of protecting investors and promoting informative, accurate, and independent audit reports. He also noted the SEC’s intent to continue close engagement with the PCAOB as the new board pursues its priorities and objectives.

SEC approves PCAOB budget and accounting support fee for 2026

The SEC approved the PCAOB’s 2026 budget and accounting support fee on Jan. 22, 2026, reflecting a 9.4% decrease from the prior year. In a related statement, Atkins noted that the approved budget reflects a renewed focus on the PCAOB’s core statutory mission and the importance of diligent oversight of auditors while minimizing unnecessary costs borne by public companies. Atkins stated that the SEC will continue to oversee the PCAOB’s activities and budget consistent with its statutory responsibilities.

Division director outlines ‘coming attractions’

In a Feb. 13, 2026, statement, James Moloney, director of the SEC’s Division of Corporation Finance (CorpFin), outlined the division’s forthcoming priorities and rulemaking efforts as part of implementing Atkins’ agenda to reduce disclosure burdens and modernize reporting. Priorities include:

Advancing crypto assets reform and a clear taxonomy for digital assets
Implementing the Holding Foreign Insiders Accountable Act (HFIAA)
Exploring a shift to semiannual reporting
Reducing regulatory burdens under Regulation S-K
Advancing rule proposals following concept releases on foreign private issuer eligibility and residential mortgage-backed securities disclosures
Issuing ongoing staff-level guidance and no-action letters to help market participants navigate evolving rules

SEC updates Compliance and Disclosure Interpretations

On Jan. 23, 2026, CorpFin updated various Compliance and Disclosure Interpretations (C&Dis) related to Securities Act sections and Securities Act rules. On Feb. 17, CorpFin made further updates to the Securities Act rules C&DIs and also updated Regulation Crowdfunding C&DIs.

SEC divisions issue statement on tokenized securities

CorpFin and the SEC’s Division of Investment Management and Division of Trading and Markets issued a staff statement on Jan. 28, 2026, addressing the application of the federal securities laws to tokenized securities. The statement describes tokenized securities as financial instruments meeting federal securities laws’ definition of “security” and represented by crypto assets. In addition, the statement outlines issuer-sponsored and third-party tokenization models.

Chair delivers opening remarks at SEC-CFTC event

On Jan. 29, 2026, Atkins delivered opening remarks at an SEC-Commodity Futures Trading Commission (CFTC) event focused on Project Crypto, a joint initiative between the two agencies. Atkins stated that the initiative is intended to prepare the agencies to implement any new legislation and described efforts to reduce regulatory friction and harmonize standards and definitions where appropriate.

From the Public Company Accounting Oversight Board (PCAOB)

PCAOB announces advisory group appointments

On Jan. 30, 2026, the PCAOB announced new and continuing appointments to its Investor Advisory Group (IAG) and Standards and Emerging Issues Advisory Group (SEIAG). Members of both advisory groups generally serve two-year terms and provide input to the PCAOB on investor perspectives, auditing standards, and emerging issues relevant to audit oversight. Background information for each appointed and continuing advisory group member is available on the PCAOB website.

PCAOB publishes broker-dealer audit focus on related-party transactions

On Feb. 4, 2026, the PCAOB released a staff publication, “Broker-Dealer Audit Focus: Related Party Transactions,” highlighting recurring inspection deficiencies related to auditors’ testing of transactions between broker-dealers and their parent companies or affiliates. The publication reinforces key expectations under PCAOB standards, including risk assessment, testing of revenue and expense allocations, evaluation of intercompany balances, and clear related-party disclosures. In addition, it outlines common inspection deficiencies and good practices observed.

From the American Institute of CPAs (AICPA)

AICPA updates stablecoin reporting framework

On Jan. 12, 2026, the AICPA announced expanded 2025 reporting criteria for asset-backed, fiat-pegged stablecoins to include a new section focused on controls over token operations. While the original framework addressed disclosures about outstanding tokens and reserves at a point in time, the update emphasizes the design and effectiveness of controls supporting activities such as issuance, redemptions, custody, and governance.

The revisions aim to strengthen transparency and trust by providing a structured approach to evaluating operational risks and offering practical guidance for both issuers and practitioners.

From the Center for Audit Quality (CAQ)

CAQ releases publication on the role of auditors in digital assets

The CAQ released, on Jan. 27, 2026, “The Role of the Auditor in Digital Assets: Present and Future,” which examines the rapidly evolving digital asset ecosystem and the role auditors can play in enhancing trust and transparency. The publication addresses current market and regulatory developments related to digital assets, outlines how auditors can use existing capabilities to provide audit and attestation services in this area, and highlights key considerations and questions for boards, regulators, and policymakers as digital asset activity continues to expand.

CAQ CEO shares 2026 outlook for the audit profession

On Feb. 4, 2026, Julie Bell Lindsay, CEO of the CAQ, released her “2026 Audit Profession Outlook,” reflecting on the current state and future direction of the public company audit profession in a post-disruption environment. The outlook covers the profession’s role in sustaining trust and transparency amid rapid technological change, evolving regulatory oversight, and increased use of emerging technologies such as generative AI. It also highlights the importance of balanced, implementable regulation and continued focus on strengthening the audit talent pipeline, emphasizing collaboration across auditors, companies, investors, and regulators to support confidence in U.S. capital markets.