September 2026 Financial Reporting, Governance, and Risk Management
Message from Sydney Garmong
My next chapter
Yesterday brought the beginning of fall and all things pumpkin. Today marks the beginning of my last week at Crowe. My chapter will end on Sept. 30, 2026. I joined Crowe on Oct. 7, 2002, so just shy of 24 years ago. It has been a wonderful journey, and I wish my Crowe colleagues all the very best.
I am proud to be from Indiana – Terre Haute to be specific, although I have been in D.C. since 1999. After graduating from Indiana University, I spent a decade auditing community banks and credit unions in Indiana … and mostly loved every minute.
I care deeply about the accounting profession and the American Institute of Certified Public Accountants (AICPA), where I started my fellowship in 1999. During my time with the AICPA, in response to several high-profile corporate failures, our profession and corporate America experienced monumental changes: the Sarbanes-Oxley Act of 2002 with implementing regulations and the formation of the Public Company Accounting Oversight Board (PCAOB). We can add Y2K, which came and went without fanfare, and the dot-com bubble.
I joined Crowe from the AICPA and was employee No. 1 for Crowe in Washington, D.C., and worked from home – which really was not a thing in 2002. We formally opened our Washington, D.C., office on Aug. 12, 2015. Today, it is a thriving office, and I am grateful to have been part of the journey.
Since joining Crowe, I have loved being a part of the AICPA Depository Institutions Expert Panel (DIEP) to address technical practice issues and liaise with the Financial Accounting Standards Board (FASB), the Securities and Exchange Commission, the federal banking agencies, and the National Credit Union Administration to contribute to the greater good. The caliber of committee members is outstanding – they are not only my colleagues but also my friends.
And no look back at developments would be complete without mentioning the FASB’s current expected credit losses (CECL) model. What would become CECL started in 2010 and ended with a final standard issued on June 16, 2016 – which means CECL turned 10 this year! On the heels of the global financial crisis, with CECL and other major standards, everyone was exceptionally busy from 2010 to 2019. With those standards in the rearview mirror, I cannot believe I contemplated in 2019 what I would be doing in 2020. Sigh.
Last week were the AICPA Conference on Banks and Savings Institutions and Conference on Credit Unions, with more than 1,500 attendees. It was my pleasure to serve as chair of the banking conference. Like the DIEP, the committee is comprised of high-caliber colleagues. My Crowe colleagues did daily pieces on the conferences, and I hope you enjoyed those quick hits. Please watch for the Crowe annual recap and takeaways from each conference. And mark your calendars to join us next year – Sept. 13-15, 2027 (Monday-Wednesday), at the Gaylord in National Harbor, Maryland, just south of Washington, D.C. I look forward to attending.
I will miss presenting at our annual Financial Services Year-End Conferences, which I have done since 2002. Those conferences started long before I joined Crowe – so long ago no one can recall the exact date. The 2026 conferences begin on Nov. 9, so I hope you will mark your calendars. While I will not be presenting, you might find me sitting in the audience.
- Dallas, TX – Nov. 9-10
- Columbus, OH – Nov. 16-17
- Nashville, TN – Nov. 30-Dec. 1
- New York, NY – Dec. 1-2
- Indianapolis, IN – Dec. 2-3
- Washington, D.C. – Dec. 14-15
I will miss presenting at the Crowe Quarterly Financial Services Audit Committee Overview webinars. In my role as self-appointed honorary historian, checking my archives, our first was July 10, 2014. My last was July 9, 2026. From July 2014 to July 2026, we hosted 49 webinars. I think I have missed only two. I hope you will mark your calendars to attend the Oct. 8, 2026, webinar.
I will miss being part of the Crowe Financial Institutions Executive Briefing. Going back to my archives, we have been issuing routine accounting updates for financial institutions – in some form or fashion – since May 2004.
On March 19, 2020, at the start of the pandemic, we added a greeting with Mike Percy, our then financial services leader, to offer a human connection instead of just the news. He noted, “The financial services industry has been tested in the past, and its resiliency – although with bumps in the road – has always prevailed. We will prevail through this situation as well.” Mike was right about our industry.
The profession is certainly at an inflection point, and it is exciting to see the evolution. I have found it most satisfying to understand the change, accept the change, and navigate the change.
I will not miss doing daily time entry or expense reimbursements.
I do not consider what comes next to be retirement. I do not care for the word “retire” but prefer “re-fire” or “next chapter” to describe my post-Crowe endeavors.
Outside of professional activities, perhaps my next chapter will include more Indiana University games – both basketball and football. Yes, we are now apparently a football school. If IU makes the college football playoffs, I will again follow the Hoosiers wherever they go!
Maybe that chapter will include more time with my stuffed animals, especially CECL the lion. I am aware that some find the collection to be silly or refer to me as the “lady with the stuffed animals,” but the heart behind it has always been to bring humor to what can be heavy technical topics. I enjoy understanding and sharing the why and the fix for standards.
In all seriousness, I love this profession and remain committed to contributing in any way I can, including continuing to serve the AICPA as a volunteer.
For all my years at Crowe, it has been my honor and privilege to serve you, our clients, and this profession. If you would like to stay in touch, you can find me on LinkedIn.
With that, I hope you enjoy this month’s FIEB. Thank you for turning to Crowe to keep you updated. You are in good hands going forward.
Fed supervision vice chair calls for CECL relief for community banks
On Sept. 8, 2026, Federal Reserve (Fed) Vice Chair for Supervision Michelle Bowman published an opinion article, “How To Make Life Hard for Small Banks,” in The Wall Street Journal. She argued that the Financial Accounting Standards Board’s (FASB) current expected credit losses (CECL) standard imposes disproportionate costs on community banks without producing commensurate changes in their loan-loss reserves.
Bowman cited feedback from a recent FASB post-implementation review (PIR) roundtable and examples from community banks to illustrate what she described as the disproportionate effects of CECL on smaller institutions. She raised concerns about the costs of vendor models, validation, systems, data infrastructure, additional personnel, and consultants as well as the standard’s potential economic effects. Specifically, Bowman said recognizing expected credit losses over the contractual life of a loan could produce more volatile reserve outcomes and increase provisioning during periods of economic stress. She maintained that unexpected losses should instead be addressed through regulatory capital requirements and urged the FASB to permit smaller financial institutions to return to the incurred-loss methodology.
These concerns arise as the FASB continues its PIR of the Topic 326, “Credit Losses,” standard. As part of the PIR, the FASB is conducting a survey to better understand the costs and activities associated with implementing and applying the standard. Feedback from preparers will inform the FASB’s evaluation of whether the standard is achieving its intended objectives and whether its benefits justify the associated implementation and ongoing costs. The survey is intended only for preparers of financial statements.
FDIC and OCC issue final rule to prioritize material financial risks
On Aug. 27, 2026, the Federal Deposit Insurance Corp. (FDIC) and Office of the Comptroller of the Currency (OCC) issued a final rule establishing a common definition of an “unsafe or unsound practice” and uniform standards for when and how the OCC and FDIC can issue matters requiring attention (MRAs) and communicate supervisory observations and other violations identified during examinations. The agencies said the rule is intended to focus supervision on material financial risks and violations of banking laws rather than policies, processes, documentation, and other nonfinancial matters. The framework also provides for supervisory treatment to be tailored based on an institution’s specific risk factors.
The rule is a meaningful supervisory development because it could affect both what examiners elevate as an MRA and how institutions respond to examination findings. For banks, the practical impact will be seen in examination preparation, issue management, and remediation, with greater emphasis on whether a finding presents a material financial risk rather than whether an institution has followed a particular process or documentation practice. The final rule becomes effective Nov. 2, 2026.
Banking agencies and the NCUA clarify SAR confidentiality requirements for customer communications
On Sept. 2, 2026, the Financial Crimes Enforcement Network (FinCEN), Fed, FDIC, National Credit Union Administration (NCUA), and OCC issued a joint statement clarifying that Suspicious Activity Report (SAR) confidentiality requirements do not prevent banks and credit unions from communicating with customers about potentially fraudulent or suspicious transactions, account restrictions, or account closures. Institutions may discuss the underlying facts, transactions, and documents on which a SAR is based, provided the communication does not disclose the existence or filing of a SAR. The statement does not change existing Bank Secrecy Act requirements or establish new supervisory expectations.
The clarification could help institutions provide customers with more meaningful information during fraud investigations and account-closure decisions without violating SAR confidentiality requirements. Banks and credit unions should consider reviewing investigation procedures, customer communication scripts, escalation protocols, and employee training to ensure personnel understand the distinction between protected SAR information and the underlying activity that might be discussed.
Banking agencies and the NCUA rescind 2022 statement on special purpose credit programs
On Aug. 25, 2026, the Department of Housing and Urban Development, Consumer Financial Protection Bureau, Department of Justice, FDIC, NCUA, OCC, and Federal Housing Finance Agency rescinded the 2022 Interagency Statement on Special Purpose Credit Programs Under the Equal Credit Opportunity Act and Regulation B. The agencies stated that creditors should not rely on the statement or related withdrawn guidance going forward and emphasized that special purpose credit programs must comply with the Equal Credit Opportunity Act, Regulation B, and, where applicable, the Fair Housing Act.
This rescission is significant for institutions that offer or are considering special purpose credit programs because it removes the agencies’ prior interpretive assurances concerning the design and operation of those programs. Institutions should consider reviewing program eligibility criteria, supporting legal analysis, documentation, marketing, and fair lending controls to confirm that existing or proposed programs remain consistent with applicable law.
FDIC board approves interim final rule regarding reciprocal deposits
On Aug. 27, 2026, the FDIC board approved an interim final rule implementing statutory changes to the treatment of reciprocal deposits under the brokered deposit framework. The rule increases the amount of reciprocal deposits that qualifying agent institutions may exclude from treatment as brokered deposits through a tiered, liabilities-based calculation, subject to a maximum of $30 billion. The rule also expands the definition of an agent institution and provides additional clarification on application of the reciprocal deposit exception.
The change could provide meaningful funding flexibility for institutions that use reciprocal deposit networks, particularly those approaching the previous statutory limits. Banks should consider how the revised thresholds affect brokered deposit classifications, funding strategies, and related reporting while also reviewing whether they continue to meet the requirements for agent institution status. Comments are due by Oct. 1, 2026.
FDIC reports stronger second quarter 2026 industry results
On Aug. 25, 2026, the FDIC reported that FDIC-insured institutions generated aggregate net income of $90.1 billion during the second quarter of 2026, an increase of 12% from the prior quarter. Return on assets increased to 1.37%, net interest margin rose to 3.32%, and domestic deposits increased for the eighth consecutive quarter. Loan balances also increased 1.8% during the quarter and 6.8% from a year earlier, while past-due and nonaccrual and net charge-off rates declined.
The results point to continued earnings and balance sheet resilience across the banking industry entering the second half of the year. The combination of stronger margins, deposit growth, and improving credit metrics is encouraging for institutions, although management teams will still want to monitor how changes in interest rates, funding conditions, and individual portfolio concentrations affect performance.
OCC updates enforcement and supervisory standards
On Aug. 27, 2026, the OCC announced changes to its enforcement and MRA policies and procedures intended to improve transparency, consistency, and proportionality in bank supervision. The OCC also publicly released its MRA policy manual and proposed a framework for distinguishing substantive violations from technical violations. Under the proposed framework, certain technical violations could be addressed outside the MRA process, while supervisory and enforcement responses would focus more heavily on material financial risks and substantive legal violations.
For national banks and federal savings associations, the changes could make supervisory expectations more predictable and provide greater clarity when an issue rises to the level of an MRA. The distinction between substantive and technical violations could be particularly important for compliance functions because it mightay affect how examination findings are categorized, escalated, tracked, and remediated. Comments on the proposal are due by Oct. 1, 2026.
OCC discusses digital asset innovation and implementation of the GENIUS Act
On Aug. 19, 2026, Comptroller of the Currency Jonathan Gould discussed digital asset innovation, bank chartering, and the OCC’s implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Gould said the OCC has received 40 new bank charter applications since the current administration took office and that more than half involve some form of digital asset activity. He also noted that payment stablecoins are increasingly appearing in proposed bank business models and said the OCC expects to issue its final rule implementing the GENIUS Act by November.
The remarks provide another indication that digital asset activities are becoming more integrated into the OCC’s traditional chartering and supervisory framework rather than being treated as a separate category of banking activity. For institutions considering stablecoins or other digital asset products, the comments reinforce the importance of incorporating those activities into broader governance, risk management, and compliance planning as the regulatory framework develops.
FinCEN proposes rule to revoke Banque Misr UAE’s U.S. correspondent banking access
On Aug. 28, 2026, FinCEN proposed a rule that would identify Banque Misr UAE as a financial institution of primary money laundering concern and prohibit U.S. financial institutions from opening or maintaining correspondent accounts for the institution. The proposal also would require covered U.S. institutions to take reasonable steps to prevent transactions involving Banque Misr UAE from being processed through other foreign correspondent accounts and would impose related due diligence requirements. FinCEN said the proposed measure applies specifically to Banque Misr UAE and not to Banque Misr operations in other countries.
For institutions with correspondent banking or cross-border payment exposure, the proposal is important because a final rule could require changes to due diligence, transaction screening, and correspondent account controls. Banks should also consider the potential for indirect exposure through foreign correspondent relationships rather than focusing solely on direct accounts maintained for the institution. The public comment period will close on Oct. 1, 2026.
Fed chair addresses monetary policy and economic outlook
On Aug. 28, 2026, Fed Chair Kevin Warsh discussed monetary policy, financial conditions, artificial intelligence, and the economic outlook at the Federal Reserve Bank of Kansas City’s Economic Policy Symposium in Jackson Hole, Wyoming. Warsh emphasized the importance of timely economic data and market signals in policymaking and argued that forward guidance should play a more limited role during normal economic conditions. He also pointed to strong business investment, resilient consumer spending, stable labor market conditions, and relatively accommodative credit conditions while acknowledging that inflation remains above the Fed’s 2% objective.
For financial institutions, the remarks suggest that expectations for monetary policy could become more responsive to incoming data and less dependent on explicit guidance about the future path of interest rates. That could increase the importance of scenario analysis and flexibility in funding, pricing, liquidity, and interest rate risk management as institutions plan for changing policy conditions.
Fed releases minutes of July FOMC meeting
On Aug. 19, 2026, the Fed released the minutes of the Federal Open Market Committee (FOMC) July 28-29 meeting, providing additional detail on the policy decision covered in the prior briefing. Participants continued to view inflation as elevated while generally describing economic activity as solid and labor market conditions as stable. The minutes also reflected differing views about the appropriate policy stance, with several participants favoring a 25-basis-point increase even though the committee ultimately maintained the target range for the federal funds rate at 3.5% to 3.75%.
The minutes provide additional context around the degree of uncertainty within the committee and reinforce that the future path of rates remains sensitive to incoming inflation, employment, and economic data. For financial institutions, that uncertainty remains relevant to funding costs, deposit pricing, loan pricing, interest rate risk management, and broader balance sheet planning.
FASB issues standard on investment company fair value reporting
On Sept. 9, 2026, the FASB issued Accounting Standards Update (ASU) 2026-03, “Fair Value Measurement (Topic 820): Investment Companies With Equity Securities Subject to Contractual Sale Restrictions.” The ASU creates a limited exception to existing Topic 820 guidance for investment companies within the scope of Topic 946, “Financial Services – Investment Companies.” Under the new guidance, an investment company is required to consider the effect of a contractual sale restriction when measuring the fair value of an equity security and disclose the amount of the discount attributable to the restriction. The amendments are intended to better reflect how market participants value restricted securities and could affect reported net asset values, performance reporting, and related management fees.
The standard could be relevant to financial institutions with affiliated investment companies, funds, or asset management operations, but it does not broadly change fair value accounting for institutions outside Topic 946. The amendments are effective for annual reporting periods beginning after Dec. 15, 2027, including interim periods within those annual periods, with early adoption permitted. The amendments will be applied prospectively to in-scope equity securities as of the adoption date.
FASB proposes enhanced cash-equivalent disclosures and guidance for certain digital assets
On Aug. 18, 2026, the FASB issued a proposed ASU, “Statement of Cash Flows (Topic 230): Cash Equivalents – Disclosure Enhancement and Evaluation of Certain Digital Assets.” The proposal would require entities that present assets as cash equivalents to disclose annually the significant components and related amounts of those assets. It also would add illustrative examples clarifying how certain digital assets, including stablecoins, should be evaluated under the existing definition of cash equivalents without changing that definition. The proposal could be relevant to all financial institutions that report assets as cash equivalents and particularly to institutions holding stablecoins or evaluating the liquidity classification of digital assets. Comments are due Nov. 19, 2026.
FAF appoints next FASB chair and calls for FASB member nominations
On Aug. 18, 2026, the board of trustees of the Financial Accounting Foundation (FAF) announced the appointment of Hillary Salo as the next chair of the FASB. Her term will begin July 1, 2027, and conclude June 30, 2034. Salo currently serves as vice chair of the FASB and chair of the Emerging Issues Task Force and will succeed Richard Jones, whose term concludes June 30, 2027.
The board of trustees also is issuing a call for nominations to fill the FASB member position that will be vacant due to Salo’s appointment. The new member of the FASB will join a board of seven full-time members based in Norwalk, Connecticut, with a five-year term beginning July 1, 2027, and eligibility for a second five-year term. In addition, the board of trustees is continuing its search for a FASB member to fill the vacancy that will be created by Marsha Hunt on July 1, 2027.
SEC proposes changes to shareholder proposal and proxy solicitation rules
On Sept. 16, 2026, the SEC issued a proposal rescinding Exchange Act Rule 14a-8, which governs the inclusion of shareholder proposals in company proxy materials, and amending Rule 14a-4(c). Under the rescission, state corporate law and each company’s governance arrangements would determine how shareholder proposals are handled. Proposed amendments to Rule 14a-4(c) would broaden companies’ ability to exercise discretionary proxy voting authority while allowing individual shareholders to opt out of granting that authority.
Separately, the SEC proposed modernizing four proxy solicitation requirements. The proposal would eliminate the annual report delivery requirement, the 20-business-day delivery period for certain documents incorporating information by reference, and the notice requirement for exempt solicitations. It also would reduce the minimum broker search period from 20 business days to five.
Comments on both proposals are due Nov. 20, 2026.
SEC proposes tailored framework for crypto asset offerings
On Aug. 18, 2026, the SEC proposed Regulation Crypto Assets, a tailored securities offering framework for certain investment contracts involving crypto assets. The proposal would establish a startup exemption for offerings of up to $5 million over a period of no more than four years. A second exemption would offer a two-tier fundraising exemption which would permit offerings during a 12-month period of up to $20 million under Tier 1 or $75 million under Tier 2. Comments on the proposal are due on Oct. 20, 2026.
In accompanying statements, SEC Chair Paul Atkins emphasized the proposal’s intended role in supporting domestic capital formation and innovation while preserving investor protections. Atkins stated that federal market-structure legislation remains necessary to establish durable rules for crypto markets. Commissioner Mark Uyeda described the proposal as a shift from an enforcement-led approach toward fixed thresholds, defined disclosure obligations, and conditions issuers can assess before conducting an offering. Commissioner Hester Peirce characterized the proposal as a step toward clear, sensible, and enforceable rules and requested comment on whether the exemptions and safe harbor are sufficiently flexible to accommodate different crypto models and evolving market developments.
For more information, please see the Crowe article “SEC Proposes Tailored Crypto Asset Offering Framework.”
SEC proposes modernization of registered transfer agent rules
On Sept. 1, 2026, the SEC proposed amendments to modernize the rules and forms applicable to registered transfer agents, which have not been substantively updated since the original rules were adopted in the late 1970s and early 1980s. The proposal reflects the widespread use of electronic recordkeeping and communications, blockchain technology, and the current services provided by transfer agents by amending existing rules and forms. Comments on the proposal are due Nov. 3, 2026.
SEC and CFTC extend Form PF compliance date
On Aug. 31, 2026, the SEC and Commodity Futures Trading Commission (CFTC) jointly issued a final rule further extending the compliance date for the Form PF amendments adopted in February 2024 from Oct. 1, 2026, to July 1, 2027. The extension became effective on Sept. 3, 2026, and changes the implementation date rather than the substance of the amendments.
SEC grants relief from certain Inline XBRL requirements
On Sept. 14, 2026, the SEC granted exemptive relief from certain Inline XBRL requirements adopted on Dec. 16, 2024. The relief applies to Forms CA-1, 1, X-17A-5 Part III, and 17-H as well as annual compliance reports of security-based swap dealers and major security-based swap participants. The order does not cover Exhibit H to Form CA-1 or Exhibit I to Form 1, which remain subject to the Inline XBRL requirements. The underlying forms and reports still are required, but the covered portions do not need to be filed or submitted in Inline XBRL. The commission stated that the relief is expected to reduce unnecessary compliance costs without meaningful losses in transparency or data accessibility for investors.
SEC proposes rescission of investment adviser political contribution rule
On Sept. 3, 2026, the SEC proposed rescinding Advisers Act Rule 206(4)-5, known as the “pay-to-play” rule, and related recordkeeping requirements. The SEC cited implementation challenges and unintended consequences, including that certain small political contributions or technical “foot faults” by an adviser or covered associated can potentially trigger a two-year prohibition on compensated advisory services to a government client. Other Advisers Act obligations would remain in effect. Comments on the rescission are due Nov. 9, 2026..
SEC begins appointment process for PCAOB board seat
On Aug. 18, 2026, Atkins announced that the SEC is soliciting candidates for a Public Company Accounting Oversight Board (PCAOB) seat with a term ending Oct. 24, 2031. The position is limited to individuals who have never been certified public accountants, and the application period closed on Sept. 8, 2026. Atkins emphasized the role of PCAOB members in protecting the integrity of the public markets through efficient stewardship of the board’s resources while minimizing unnecessary costs for companies.
SEC staff highlights observations on adviser annual compliance reviews
On Sept. 14, 2026, the Division of Examinations published a risk alert addressing investment advisers’ required annual reviews of their compliance policies and procedures. Staff observations included reviews that were untimely or incomplete, did not align with written procedures or business practices, lacked supporting documentation, or did not result in appropriate corrective action. The division encouraged advisers to assess their current practices and make appropriate improvements to their annual review processes.
PCAOB releases QC 1000 implementation questions and answers
On Aug. 17, 2026, the PCAOB released “QC 1000 Questions and Answers,” a staff resource intended to help firms implement QC 1000, “A Firm’s System of Quality Control,” before the standard’s Dec. 15, 2026, effective date. The resource addresses selected implementation matters involving the scope and application of the standard, firm risk assessments, ethics and independence, technological resources, monitoring and remediation, and evaluation and reporting. The questions and answers do not address provisions covered by the amendments proposed by the PCAOB on June 9, 2026. They reflect the views of PCAOB staff and have not been approved by the board.
The resource could help audit firms prepare for implementation and provide audit committees with additional context when discussing their auditors’ quality control readiness.
PCAOB adopts QC 1000 amendments
On Sept. 9, 2026, the PCAOB adopted amendments to certain provisions of QC 1000, “A Firm’s System of Quality Control,” and related amendments to PCAOB forms and the quality control reporting rule. The amendments are intended to improve alignment, where appropriate, with other quality management standards and reduce compliance costs without compromising the PCAOB’s investor-protection mission. Among other changes, the amendments rescind the design-only requirement and the external quality control function requirement, provide more flexibility in assigning certain quality control roles, narrow communication requirements related to firm metrics, revise the evaluation of engagement and quality control deficiencies and annual evaluation conclusions, permit firms to select their annual evaluation date, and reduce the documentation retention period from seven years to five years. The amendments do not change QC 1000’s Dec. 15, 2026, effective date and are subject to SEC approval. If approved, the amendments will become effective on that date.
AICPA approves new auditing standard addressing fraud
On Aug. 19, 2026, the AICPA’s Auditing Standards Board (ASB) approved Statement on Auditing Standards (SAS) No. 151, “The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements.” The standard clarifies and enhances auditor responsibilities involving professional skepticism, fraud-risk identification and assessment, documentation, communication, and responses when fraud or suspected fraud is identified. It also requires the auditor to understand an entity’s whistleblower or other fraud-reporting program, if one exists, and retains the presumption of a fraud risk involving revenue recognition while requiring the auditor to determine which transactions or assertions give rise to that risk. The standard does not change the definition of fraud or the auditor’s overall objective of obtaining reasonable assurance that financial statements are free of material misstatement due to fraud or error.
The standard is effective for audits of financial statements for periods ending on or after Dec. 15, 2028, with early adoption permitted. The standard will directly affect audits of nonissuer financial institutions conducted under AICPA auditing standards and could assist audit committees with discussions about fraud risk assessments, whistleblower programs, and communications with auditors.
AICPA updates digital assets practice aid
On Aug. 25, 2026, the AICPA released an updated version of its practice aid, “Accounting for and Auditing of Digital Assets.” The update adds a chapter addressing accounting considerations for stablecoin issuers, including recognition of obligations associated with issued tokens and considerations related to stablecoin reserve assets. It also adds auditing guidance for mining revenue arrangements and updates the practice aid to reflect auditing standards through SAS No. 148 and the engagement-level quality management requirements in SAS No. 146.146.
The practice aid does not establish new accounting or auditing requirements but is intended to assist practitioners in applying existing standards to evolving digital asset arrangements. The stablecoin guidance could be particularly relevant to financial institutions considering permitted payment stablecoin activities and to auditors evaluating the associated token obligations and reserve assets.
CAQ provides context for PCAOB inspection reports
On Aug. 20, 2026, the CAQ published observations on the purpose and interpretation of PCAOB inspection reports following the release of 2025 inspection results for the six U.S. global network firms. The CAQ noted that inspection reports are based on selected audits and risk areas and are not intended to provide a comprehensive assessment or ranking of an audit firm. It also emphasized that an inspection deficiency does not necessarily mean that a company’s financial statements were misstated or that a material weakness in internal control over financial reporting existed.
The CAQ reported that only one of the 312 audits reviewed by the PCAOB in 2025 resulted in a restatement. It encouraged stakeholders to consider inspection findings together with other information when evaluating audit performance and supported continued improvements in inspection consistency, transparency, quality control focus, and reporting usefulness. The observations could be relevant to audit committees of public financial institutions when evaluating and discussing their external auditor’s inspection results.
CAQ comments on PCAOB standard-setting and research agendas
During the PCAOB comment period that closed Aug. 7, 2026, the CAQ submitted a comment letter addressing the board’s standard-setting and research agendas and its overall standard-setting process. The CAQ encouraged the PCAOB to develop a transparent conceptual framework for establishing standard-setting priorities and supported adding data and technology, including digital assets, to the research agenda. It also supported projects addressing fraud, noncompliance with laws and regulations, auditor independence, and going concern.
The CAQ recommended against initiating new projects on critical audit matters or audit quality indicators, citing evidence that critical audit matters are meeting their intended objectives and concerns that firm and engagement metrics might have limited value without the context provided through audit committee discussions. The letter also provided observations regarding the potential effect of the SEC’s proposed optional semiannual reporting framework on PCAOB auditing standards.
Portions of AICPA materials reprinted with permission. Copyright 2026 by AICPA.
FASB materials reprinted with permission. Copyright 2026 by Financial Accounting Foundation, Norwalk, Connecticut. Copyright 1974-1980 by American Institute of Certified Public Accountants.
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