Stock Compensation – FASB Discusses Share-Based Consideration Payable to a Customer

As reported in its “Summary of Decisions” publication, the FASB met on February 5, 2025 and discussed feedback received on the proposed Accounting Standards Update, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer.

Climate-Related Disclosures – Acting SEC Chair Releases Statement on Climate-Related Disclosure Rules

SEC Acting Chair Mark Uyeda has issued a statement on climate-related disclosure rules. The statement indicates that Acting Chair Uyeda is taking “action on The Enhancement and Standardization of Climate-Related Disclosures for Investors rule that was adopted by the Commission on March 6, 2024 (the “Rule”). The Rule is currently being challenged in litigation consolidated in the Eighth Circuit and the Commission previously stayed effectiveness of the Rule pending completion of that litigation. The Rule is deeply flawed and could inflict significant harm on the capital markets and our economy.”

The Statement indicates that Acting Chair Uyeda has directed the SEC staff to notify the Eighth Circuit Court of the changed circumstances since adoption of the climate-related disclosure rules and request that the court not schedule the case for argument to provide time for the SEC to deliberate and determine the appropriate next steps in these cases.

Beneficial Ownership Reporting – SEC Staff Publishes New Guidance

The staff in the SEC’s Division of Corporation Finance (Corp Fin) has published a new edition of its Compliance and Disclosure Interpretation (CDI), Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G Beneficial Ownership Reporting. Corp Fin has revised Question 103.11 and added a new Question 103.12. These updates provide guidance on filing Schedules 13D and 13G.

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AUDITING AND INTERNAL CONTROLS HEADLINES

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Service Organizations – 2025 Edition of Knowledge-Based Examinations of Service Organizations Published

We have published the 2025 edition of Knowledge-Based Examinations of Service Organizations. This publication is designed to help the practitioner efficiently and effectively conduct examination engagements of service organizations in accordance with applicable standards issued by the American Institute of Certified Public Accountants (AICPA).

This new edition reflects current authoritative attestation literature including:

• AICPA Auditing Standards Board (ASB) Statements on Standards for Attestation Engagements (SSAEs), through SSAE No. 23, Amendments to the Attestation Standards for Consistency With the Issuance of AICPA Standards on Quality Management; and
• 2024 Revision of Government Auditing Standards (GAGAS, or the Yellow Book).

Dealerships – New Knowledge-Based Audits, Preparations, Compilations and Reviews of Dealerships Published

We have published a new edition of New Knowledge-Based Audits, Preparations, Compilations and Reviews of Dealerships. This publication is designed to help the auditor efficiently and effectively perform financial statement audits and, when applicable, audits of internal control over financial reporting, in accordance with auditing standards generally accepted in the United States of America (U.S. GAAS), and preparations, compilations, or review engagements of nonpublic dealers.

This new edition incorporates the provisions of the following standards:

• SAS No. 146, Quality Management for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards (effective for periods beginning on or after December 15, 2025);
• SQMS No. 1, A Firm's System of Quality Management (effective December 15, 2025);
• SQMS No. 2, Engagement Quality Reviews (effective December 15, 2025);
• SQMS No. 3, Amendments to QM Sections 10, A Firm’s System of Quality Management, and 20, Engagement Quality Reviews (effective December 15, 2025); and
• SAS No. 149, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors and Audits of Referred-to Auditors) (effective for periods ending on or after December 15, 2026).

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