What audit committees need to know for 2026

This webcast provides audit committees and management teams with practical insights to navigate year-end meetings and tackle the most pressing issues for 2026.

This webcast is part our webcast series, Better Questions for Boards, designed to provide directors with insights and questions to consider as they engage with management on a variety of complex boardroom issues.

This 60-minute session from December 2025 delivers timely guidance and forward-looking viewpoints to help audit committees prepare for the upcoming year-end meetings. Watch the replay for actionable perspectives on economic trends, regulatory shifts and reporting priorities that will shape boardroom conversations in 2026. Topics include the following:

• Macroeconomic outlook: Gain clarity on global economic expectations - from interest rates and labor market dynamics to their impact on business strategy.
• A view from Washington, DC: Understand the administration’s priorities and the evolving legislative and regulatory landscape, as well as what these things mean for your company.
• Tax policy developments: Learn about recent tax changes and uncover opportunities amid shifting policies.
• Financial reporting: Stay informed on emerging SEC and PCAOB developments and key year-end considerations for high-quality financial reporting.

The discussion is co-moderated by Patrick Niemann, Partner, Ernst & Young LLP and Jennifer Lee, Managing Director, Ernst & Young LLP. Panelists include:

• Lauren Alexander, Partner, National Professional Practice, Ernst & Young LLP
• Karen Dynan, Nonresident Senior Fellow, Peterson Institute for International Economics
• Angela Evans, EY Americas Co-Director of Tax Accounting and Risk Advisory Services
• Kristi Kennedy, Director, Office of Public Policy, Ernst & Young LLP

Key takeaways and considerations:

Macroeconomic outlook

• 2025 growth exceeded expectations, driven by the stock market, resilient consumers and strong business investments (primarily related to AI). The labor market has cooled but remains solid.
• Tariff-related inflation pressures are emerging and may slow demand as purchasing power and policy uncertainty weighs on confidence; while inflation has not accelerated as much as some anticipated, price increases may still be ahead.
• US policy changes may slow the economies of key trading partners and weaken export demand.
• The impact of tighter immigration on the labor supply and household demand remains uncertain.
• US growth should continue – but risks remains if AI enthusiasm fades and inflation rises.

Regulatory and public policy outlook

• New legislation now provides a regulatory structure for stablecoins, and more digital asset regulation is expected.
• The administration is promoting US leadership on AI with an aim to empower private growth. AI is framed as both an economic growth driver and a national security imperative. Directors will want to closely monitor associated energy costs and impacts on consumers, including the extent and related implications to which federal versus state governments will regulate AI.
• 2026 will bring ongoing discussion and debate on trade, immigration and foreign relations. Companies should watch and scenario plan around upcoming legal decisions, new legislation and the midterm elections.
• Public companies now must make additional income tax disclosures that audit committees will review in financial statements. This includes new details in areas such as rate reconciliation, income taxes paid by jurisdiction and other required disclosures.
• Tariffs may add additional uncertainty to financial projections and the ability of companies to estimate their annual effective tax rate.
• SEC Chair Atkins is prioritizing capital formation, disclosure reform and fostering innovation to make it easier to be a public company. Quarterly reporting may become optional, replaced by semiannual reporting, subject to public comment and formal rulemaking.
• Atkins is also focused on clearer rules for digital assets and enhancing accommodations for emerging growth companies.
• In recent SEC comment letters, SEC staff continue to focus on MD&A, non-GAAP financial measures, segment reporting, revenue recognition, and goodwill and intangible assets. Companies should evaluate disclosures every year, including those related to impacts stemming from macroeconomic conditions, tariffs and other developments, and governance of AI.
• New PCAOB board members are expected to be named soon.

What we heard from the audience

• Board members were evenly split on whether they are optimistic, neutral or concerned about the economic outlook for the year ahead.
• “AI and technology-related matters” topped the list of public policy areas board members anticipate spending the most time discussing in the coming year. “Energy and climate” ranked lower on the priority list.
• Most board members were only somewhat confident that there is a clear, common understanding across the board and management team of the company’s key tax-related risks.