Mid-year update: What audit committees should be watching for

Learn how companies and their audit committees are anticipating and responding to external forces reshaping board agendas at mid-year 2026.     

This webcast is part of our webcast series, Better Questions for Boards, and is focused on timely insights and questions for audit committees and boards to consider as they engage with management.

This June 2026 episode addresses evolving audit committee priorities and topics such as:

• Top geostrategic developments: Learn how shifting geopolitical and geostrategic developments are shaping the operating environment, how companies are responding to continued uncertainty, and effective practices for overseeing geopolitical risks, including risk scenario planning, third-party exposure, and other key considerations.
• Mid-year global macroeconomic outlook: Find out what to expect at a global macroeconomic level, including interest rate expectations, labor market dynamics, and evolving trade and tariff policies. Hear what these variables could mean for businesses broadly and what audit committees and boards may want to monitor.
• SEC mid-year update: Get up to date on current and emerging financial reporting and regulatory developments, including SEC and PCAOB matters and other important reminders and considerations for audit committees heading into the second half of the year.

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
• Courtney Rickert McCaffrey, EY Global Geostrategic Business Group Insights Leader
• Quentin Roach, SVP and Chief Procurement Officer, The Estée Lauder Companies Inc. and Board director, US Foods

Key takeaways

• A new set of norms is emerging for global business, marked by more direct government intervention across economies and sectors.
• Geopolitics of scarcity is intensifying, with competition over water, critical minerals and capital increasingly intersecting with national ambitions around AI and technology leadership. While not new, these pressures are converging in ways that raise the stakes for long-term strategic positioning.
• Varying regulatory, economic and political dynamics continue to shape how companies operate across markets. Tariffs, evolving trade agreements and energy price volatility are adding complexity to global operating models.
• In North America, the United States-Mexico-Canada Agreement (USMCA) review is entering a more active phase, with pre-negotiations underway and increased intensity expected through the second half of the year. Boards should prepare for a range of scenarios, including tariff changes, supply chain reconfiguration and shifts in regional sourcing and talent strategies, with second-order implications across operations.
• The US midterm elections add further policy uncertainty. Continued focus on AI and data policy will be especially relevant as regulatory approaches evolve and influence business models.
• Boards and management teams should work more closely to challenge assumptions, align on risk appetite and rigorously assess scenarios with varying likelihoods, timelines and impacts. This includes scenario planning, tabletop exercises and stronger integration of geopolitical risk into governance, oversight and KPIs.
• The US economy has remained more resilient than expected. However, the next phase of the cycle is likely to be more fragile, with higher interest rates, increased defense spending expectations and potential labor disruption from AI adoption. Prolonged geopolitical conflict increases the risk that inflation remains elevated and monetary policy stays restrictive, amplifying market sensitivity to external shocks.
• Boards should plan for growth as a base case while ensuring [EM1.1]risk management frameworks can handle a wider range of outcomes. Focus areas include energy prices, broader inflation indicators, investment trends beyond AI and overall market sentiment.
• The U.S. Securities and Exchange Commission (SEC) is likely to continue its active rulemaking agenda through 2026. The proposed shift to optional semiannual reporting could require companies to reassess reporting cadence and investor communications. Boards may ask: What are management’s plans to maintain robust interim processes if they do elect to adopt semiannual reporting? Boards should consider how disclosure practices and transparency expectations may evolve in a changing regulatory environment.

What we heard from the audience

• Thirty-seven percent of respondents said cybersecurity, data and AI-related risk is the geopolitical exposure their board is most focused on right now.
• Forty-six percent of respondents said geopolitical risk oversight is embedded in regular board and committee oversight, while 21% of respondents said it was reviewed periodically (as opposed to addressed when a disruption occurs).
• When asked which macroeconomic risk audit committees are most focused on for the balance of 2026, there was a fairly even split, with “inflation proving more persistent than expected” and “slower growth or weakening demand” at the top of the list.
• When asked how their company would approach quarterly SEC filings and investor communications if the SEC allows semiannual reporting, 38% of respondents said they would make no change, 40% of respondents said they were undecided or would assess based on peers and 22% of respondents said they would provide limited quarterly updates (e.g., key metrics only).