What do these changes mean for public companies?

The SEC has a three-part mission: to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. This core mission will remain the same under new SEC leadership. However, the focal point of the SEC’s efforts will likely shift amongst these three pillars under new leadership. The SEC was very active under former Chair Gensler with a keen focus on investor protection. During his administration, the SEC undertook several notable rulemaking efforts including those related to climate and cybersecurity. A hallmark of the former chair’s tenure was the SEC’s strong regulatory posture towards crypto assets and crypto asset intermediaries. Under the new administration, most stakeholders expect the SEC to shift its focus toward the facilitation of capital formation and take a more business-friendly approach to regulation.

How do these changes affect auditors?

The Public Company Accounting Oversight Board (PCAOB) is an independent agency but is overseen by the SEC, an authority given to the SEC under the Sarbanes-Oxley Act of 2002. During the previous administration, the PCAOB was very active under the leadership of Chair Erica Williams, pursuing numerous new rules and operating a rigorous inspection program of audit firms.

What should public companies focus on related to financial reporting?

In the midst of these changes in the regulatory landscape, public companies are also faced with adopting significant new accounting standards, including the FASB’s new standards on segment reporting and the disaggregation of income statement expenses. Segment reporting ASU 2023-07, Segment reporting, is effective for public companies in calendar year-end 2024 financial statements. The new standard requires several enhanced disclosures, but perhaps the most noteworthy change is that it permits companies to disclose multiple measures of segment profitability. This change garnered significant attention from the SEC staff because it allows companies, depending on the circumstances, to disclose measures of profit and loss in the financial statements that are considered non-GAAP measures under SEC rules, like earnings before interest, taxes, depreciation, and amortization (EBITDA). Since the initial issuance of the ASU, the SEC staff has clarified in speeches and other venues that any measures not specifically required or expressly permitted by GAAP must still comply with the SEC’s non-GAAP rules, even if those measures are allowed to be disclosed under ASC 280.

Regulatory and financial reporting changes for 2025

The regulatory environment for public companies looks much different in 2025 than in recent years. Within the first few weeks of President Donald Trump taking office, key changes in the leadership and priorities of the SEC have already taken place.

Potential impacts of the rapidly shifting landscape on the financial reporting for SEC registrants are further detailed below.

What’s changed at the SEC?

On the same day when President Trump took office, Gary Gensler stepped down from as chair of the SEC, a role he’d served since April 2021. While the SEC is a nonpartisan regulatory agency, commissioners, including the chair, are appointed by the president, and it’s not unusual to see turnover in the chair role when there’s a change in the White House administration.

President Trump nominated Paul Atkins, a former SEC commissioner during the Bush administration in the mid-2000s, to succeed Gensler as chair of the SEC. He’s expected to assume the role following confirmation by the Senate sometime later this year. In the interim, Commissioner Mark Uyeda has been designated as acting chairman.

Other notable leadership changes at the SEC include those of Paul Munter, the former chief accountant, and Erik Girding, the former director of the Division of Corporation Finance, both of whom have left the commission.

On the same day when President Trump took office, Gary Gensler stepped down from as chair of the SEC, a role he’d served since April 2021. While the SEC is a nonpartisan regulatory agency, commissioners, including the chair, are appointed by the president, and it’s not unusual to see turnover in the chair role when there’s a change in the White House administration.

President Trump nominated Paul Atkins, a former SEC commissioner during the Bush administration in the mid-2000s, to succeed Gensler as chair of the SEC. He’s expected to assume the role following confirmation by the Senate sometime later this year. In the interim, Commissioner Mark Uyeda has been designated as acting chairman.

Other notable leadership changes at the SEC include those of Paul Munter, the former chief accountant, and Erik Girding, the former director of the Division of Corporation Finance, both of whom have left the commission.

Porter Loud

Principal

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SEC outlook: Regulatory and financial reporting updates for Q1 2025

What’s changed at the SEC?

Porter Loud

NIL and Title IV financial aid considerations for colleges and universities

What do these changes mean for public companies?

Crypto

Climate

How do these changes affect auditors?

What should public companies focus on related to financial reporting?

Segment reporting

Segment reporting

Disaggregation of income statement expenses (DISE)

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