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Quarterly update for audit committees


Find out how audit committees can prepare for 2025 Q1 reporting.


Audit committees are closely monitoring and discussing how companies should adapt to the evolving legislative and regulatory implications of the second Trump administration. Their Q1 discussions may be centered on tax policy, trade, mergers and acquisitions, regulatory changes and sustainability reporting.

Meanwhile, trade tensions, industrial sovereignty initiatives, tax policy, and regional conflicts are causing companies and boards to reassess their global footprint, supply chains, ecosystem partners and addressable markets. Finally, audit committees continue to consider the risks and financial reporting implications stemming from ongoing regional conflicts, developments in oil and gas supplies, financial market stress, trade interruptions and regional trade dynamics. This quarterly update provides important updates for audit committees as they navigate these and other developments.

Risk management

Boards and audit committees continue to face an increasingly challenging risk landscape driven by shifting political dynamics, economic volatility and regulatory shifts.

 

President Trump’s second-term agenda is already proving to be expansive and has been underpinned by strong executive action early on. Companies are navigating an environment that includes assessing current conditions and responding to emerging regulatory shifts.

 

Accordingly, audit committees and boards are monitoring a range of policy issues and discussing how the new Washington environment will impact business risks.

 

Accounting and disclosures

Macroeconomic uncertainty may be elevated in the near-term. Accordingly, audit committees will continue to evaluate evolving impacts of the uncertain economic environment and other shifts in the business landscape on their financial reporting processes.

 

SEC rulemaking and other regulatory considerations

On his first day in office, President Donald Trump officially nominated Paul Atkins to be Chairman of the Securities and Exchange Commission (SEC) and designated Commissioner Mark Uyeda as Acting SEC Chairman. Expectations are that under Atkins’ leadership, new SEC priorities will include capital formation, establishing a regulatory framework for digital assets, and innovation. Atkins was an SEC commissioner from 2002-2008 and his priorities included principles-based regulation, close consideration of regulatory costs and benefits and lower enforcement penalties for issuers to avoid harming shareholders. In recent years, Atkins has worked closely with the digital assets industry, including leading efforts to develop a best practices guide for digital assets issuances and trading platforms. Both Acting SEC Chairman Uyeda and SEC Commissioner Hester Peirce were counsel to Atkins while he was at the SEC and are expected to be aligned with him on many topics. Though Atkins’s nomination hearing is pending, his confirmation is expected by late March or early April.

Click here to read the full report and find questions for the audit committee to consider as they talk with management, compliance personnel and internal and external auditors.


Reports from previous quarters

What audit committees should prioritize in 2025

2024 Q3 reporting update for audit committees

2024 Q2 reporting update for audit committees


Summary

For Q1 reporting, audit committees are focused on evolving legislative and regulatory developments. Key areas include tax policy, trade, M&A, regulatory changes, and sustainability reporting. They are also considering the impact of geopolitical tensions, trade policies, and the importance of risk management and financial reporting.

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