KPMG Flags Eight Key Issues Shaping 2026 Audit Committees

Tariffs, economic stress, and geopolitical whiplash

KPMG’s latest audit committee agenda reads like a workload forecast for the people who will have to support it. Released through the KPMG Board Leadership Center on December 17, 2025, the package is based on survey work and direct interactions with audit committees and business leaders, and KPMG says the whole point is to keep investor confidence intact as business complexity rises.

The first pressure point is tariff-related, economic, and geopolitical volatility. KPMG says tariff uncertainty can spill into revenue recognition, inventory costs, impairment risk, and credit losses, which means audit and advisory teams will spend more time challenging assumptions, rebuilding scenarios, and documenting why management’s numbers still hold.

The SEC’s rulebook stays unsettled

The agenda also reflects a regulatory climate that is still moving under everyone’s feet. KPMG points to investor and regulator demand for high-quality disclosures on climate, cybersecurity, AI, human capital, consumer trends, and sustainability risks, which pushes audit committees well beyond traditional financial reporting oversight.

That wider remit matters inside KPMG because every disclosure issue becomes another review cycle, another memo, and another coordination call between audit, tax, legal, and advisory teams. Climate is the clearest example: the Securities and Exchange Commission adopted its climate-related disclosure rules in March 2024, and in July 2025 SEC Commissioner Caroline Crenshaw said the U.S. Court of Appeals for the Eighth Circuit had directed the commission to provide a status update in the litigation. For KPMG professionals, that kind of uncertainty keeps the compliance clock ticking even when the rulebook is still contested.

AI oversight is no longer an innovation project

KPMG says audit committees need to clarify their role in overseeing AI, and that is a signal to both clients and staff that this is no longer a side conversation for the tech-savvy few. AI now sits inside the core governance agenda, alongside questions about how models are trained, how outputs are checked, and where human judgment still has to stay firmly in the loop.

For KPMG teams, that usually means more questions from directors who want practical assurance without slowing the close. Audit and advisory professionals will be asked to explain where AI is being used, how controls are changing, and whether the technology is influencing estimates, forecasts, or disclosures in ways that deserve extra scrutiny.

Cybersecurity and data governance become board-level evidence

Cybersecurity and data governance are tightly linked in KPMG’s framing, and that is exactly how the work lands on the ground. Once audit committees start treating cyber risk as part of reporting quality and control integrity, the conversation stops being about IT hygiene and starts becoming about evidence, escalation, and resilience.

That creates more demand for proof across systems, vendors, and data flows. KPMG professionals can expect more requests for walkthroughs, more questions about where data comes from, and more pressure to show that controls around access, privacy, and incident response are working well enough to support the numbers in front of the committee.

Finance talent and internal audit capacity are getting squeezed

KPMG also highlights changes in finance talent and efficiency, and that piece of the agenda lands directly on the staffing strain many teams already feel. The firm says internal audit’s expanded remit will require upskilling in data analytics, AI, cybersecurity, sustainability, and resilience, and it wants audit committees to set clear expectations for the function’s talent, resources, and expertise.

That is a realistic description of where the pressure shows up internally. More scope with the same headcount means more co-sourcing, more specialist reviews, and more dependence on senior people who can translate technical findings into board-ready language, all while managing busy season, promotion cycles, and the long climb toward partner track.

Sustainability reporting stays on the hook

Sustainability is no longer framed as a separate reporting lane. KPMG’s agenda says audit committees should monitor management’s preparedness for new climate and sustainability reporting frameworks and standards, and the firm’s own sustainability reporting research found that many companies were already beginning or increasing work ahead of mandatory deadlines.

For KPMG staff, that means sustainability reporting is becoming another cross-functional assurance exercise, not just a policy update. Finance, ESG, operations, procurement, and legal teams all end up in the same conversation, and audit teams are left to verify that the controls behind the disclosures are ready before the reporting clock runs out.

Audit quality and the external auditor get more scrutiny

KPMG’s agenda also leans hard on audit quality, and that lines up with what the Public Company Accounting Oversight Board has been signaling. The PCAOB’s 2025 inspection priorities emphasized audit quality, critical audit matters, and increased use of technology including generative AI, while also giving audit committee members suggested questions to ask auditors.

That puts extra weight on the relationship between audit committees and the external auditor. KPMG says committees should insist on frequent, candid, open communication, and for KPMG professionals that usually means more documentation, more challenge, and less room for vague answers when the committee wants to understand where the risks really sit.

Committee composition becomes the gating issue

The last issue is committee composition, and it may be the one that determines whether all the others can actually be governed well. Once audit committees are expected to oversee AI, cybersecurity, sustainability, financial reporting, and internal audit capability at the same time, the mix of skills in the room starts to matter as much as the agenda itself.

That is where the downstream burden on KPMG becomes most visible. Directors with different backgrounds ask different questions, and the broader the skill mix, the more likely it is that audit and advisory teams will need to prepare layered briefings, bespoke follow-up material, and sharper explanations for a board that wants certainty in a year built on uncertainty. KPMG’s message is simple: the committee’s remit is widening, and every one of those priorities will arrive eventually at the desks of the people doing the work.