Change in financial reporting has maintained a steady pace. The second quarter of 2026 brought meaningful insights into employee benefit plans (EBPs), a first-of-its-kind FASB standard, and a set of SEC proposals that could reshape how public companies report and when they need an internal control audit. This article outlines what’s happening and what it may mean for your organization, as was recently presented in “Quarterly Perspectives Q2 2026: Financial Reporting & Beyond.”
Employee Benefit Plan Updates & Key Observations
Cybersecurity remains a top focus for the U.S. Department of Labor (DOL). Because EBPs hold substantial investment assets alongside sensitive participant data, they present a significant target, and regulatory expectations have intensified accordingly.
The central principle for fiduciaries, e.g., plan sponsors, is that oversight responsibility cannot be delegated to their service providers. While plan operations may be outsourced to recordkeepers, custodians, or other service providers, the fiduciary duty to oversee those relationships, and the performance of those services, remains with the plan sponsor. The DOL expects fiduciaries to demonstrate active oversight. In practice, that means:
- Documented governance practices and decisions recorded in fiduciary meeting minutes
- Vendor oversight, including review of each provider’s security policies, breach history, and insurance coverage
- Incident response planning that is established before it’s needed
Organizations should note that, for 2026, the Employee Benefits Security Administration has designated cybersecurity a national enforcement project. Cybersecurity practices are now a standard component of plan investigations as a result, and fiduciaries should be prepared to demonstrate that appropriate oversight and documentation are in place. Explore “Fraud in Employee Benefit Plans – How to Help Reduce Your Risk” for additional insights on this topic.
The New FASB Standard on Environmental Credits
FASB’s Accounting Standards Update (ASU) 2026-02 establishes the first in-depth U.S. GAAP guidance for both environmental credits and environmental credit obligations, adding a new section to the accounting codification. Previously, in the absence of authoritative guidance, entities applied varied approaches by analogy, for example, by accounting for credits as inventory, intangible assets, or under other models.
The guidance applies to entities that generate, acquire, sell, or use environmental credits, as well as those holding an enforceable regulatory obligation that may be settled using such credits. Common examples include cap-and-trade programs, renewable fuel standards, and renewable energy credits. Notably, the standard addresses the financial statement treatment of these credits and related obligations and is distinct from broader sustainability or greenhouse gas reporting frameworks.
Effective dates provide a measure of lead time, with the first annual period being 2028 for calendar-year public business entities and 2029 for other calendar-year entities, with early adoption permitted. Given the retrospective transition approach and the continued evolution of regulatory expectations, organizations should consider the standard’s impact now to support an orderly implementation.
Emerging SEC Rule Proposals Impacting Reporting & Filer Status
The SEC has entered a particularly significant period of rulemaking for registrants, and several proposals warrant close attention. The most prominent proposed rule would permit public companies to elect semiannual rather than quarterly reporting. The proposal has attracted considerable investor interest, generating substantial public feedback. That level of engagement reflects the significance of the potential shift, and the SEC must weigh all the feedback carefully before finalizing any rule.
“It’s been a very consequential period of time for the SEC in terms of rulemaking.”
– Greg Faucette, Partner, National Director of SEC & Specialized Financial Reporting
A second proposal would simplify the current filer classification framework and expand accommodations for smaller reporting companies. Some of the key provisions would:
- Consolidate the existing five filer categories into two: nonaccelerated filers and large accelerated filers
- Raise the large-accelerated filer threshold from $700 million to $2 billion in public float
- Establish a minimum five-year transition period for newly public companies before an audit of internal control over financial reporting would be required
One consequence merits particular emphasis. Because auditor attestation of internal control over financial reporting under Section 404(b) applies only to large-accelerated filers, raising the threshold would reduce the population of companies subject to that requirement. Organizations should watch these proposals closely, as the outcomes could reshape both reporting cadence and the scope of independent control attestation.
On the Horizon
Looking ahead, organizations should keep an eye on upcoming FASB implementation requirements, evolving environmental reporting expectations, and potential SEC rulemaking outcomes. EBP fiduciaries, in particular, should prepare for continued DOL attention on cybersecurity governance and documentation.
How Forvis Mazars Can Help
Staying ahead in a fast-changing reporting environment is essential. At Forvis Mazars, our experienced Assurance team is ready to help you prepare for what’s next and navigate challenges like globalization, economic shifts, and regulatory changes. If you have any questions or need assistance, please reach out to a professional at Forvis Mazars.
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Watch our on-demand webinar, “Quarterly Perspectives Q2 2026: Financial Reporting & Beyond,” for more information on these topics.
The information set forth contains the analysis and conclusions of the author(s) based upon his/her/their research and analysis of industry information and legal authorities. Such analysis and conclusions should not be deemed opinions or conclusions by Forvis Mazars or the author(s) as to any individual situation as situations are fact-specific. The reader should perform their own analysis and form their own conclusions regarding any specific situation. Further, the author(s)’ conclusions may be revised without notice with or without changes in industry information and legal authorities.