KPMG flags tariff uncertainty, quiet SEC and FASB in Q1 2026 outlook

Tariffs are still the first problem to triage

KPMG’s Q1 2026 Quarterly Outlook reads less like a broad market recap and more like a worklist for the next several quarters. The sharpest message is that geopolitical volatility has outrun standard setting: businesses are still wrestling with tariff-related uncertainty, while the SEC and FASB have stayed comparatively quiet.

That matters because tariff exposure is not just a macro issue anymore. It is a direct audit, forecasting, and disclosure problem, especially for clients trying to estimate margins, price resets, and possible refund claims. KPMG ties the latest uncertainty to the U.S. Supreme Court’s February 20, 2026 decision that overturned tariffs imposed under the International Emergency Economic Powers Act, then notes that the ruling did not resolve refund mechanics. In plain terms, the legal question moved, but the accounting and cash-recovery questions did not.

Refund risk is the part clients are likely to miss

The Court of International Trade added another layer on March 4, 2026, when it ordered the Trump administration to begin refunding tariffs imposed under IEEPA. Even that did not settle the operational reality for companies, because the administration was still weighing appeal options and the scope of refunds remained uncertain.

That leaves audit and tax teams with a familiar but uncomfortable job: separate what is legally decided from what is economically recoverable. If a client paid IEEPA tariffs, the immediate question is not whether the policy shifted in Washington. It is whether management can support any receivable, contingency, or disclosure around refund expectations without overpromising. That kind of uncertainty can ripple into estimates, reserves, and the tone of management discussion and analysis.

KPMG’s own tariff research reinforces the point. The 2026 survey built on survey waves from May and September 2025 and found that businesses were still operating in a higher-cost environment, with persistent margin pressure, continued reliance on price increases, and a gradual shift from short-term tariff defense toward longer-term structural change. Some companies are reshoring or reworking supply chains, but those moves take time, capital, and cross-functional coordination. In other words, the burden is no longer just customs and procurement. It is finance, controls, and strategy.

The SEC and FASB are quiet, but that quiet should not be mistaken for rest

The other useful signal in the outlook is what is not happening. KPMG says the immediate 2026 environment is relatively quiet for SEC and FASB activity compared with the tariff and sustainability backdrops. That lull may feel welcome in busy season planning, but it can also create a false sense of margin in the calendar.

KPMG’s outlook still points to anticipated SEC rulemaking and trending transactions, which means deal teams and reporting teams need to stay alert even if the agency pace is subdued. Quiet quarters often become catch-up quarters, especially when businesses have been deferring disclosure work, valuation analysis, or transaction accounting decisions while waiting for the next round of guidance. For people on the partner track, that means fewer headline standards to brief clients on now, but more time to prepare them for the next move.

2026 brings a short pause before the next big disclosure lift

Only two accounting standards became effective for calendar year-end public companies in 2026, which gives preparers a narrow breather before the next major requirement lands. The biggest one is FASB’s disaggregation of income statement expenses standard, ASU 2024-03, issued on November 4, 2024 and clarified on January 6, 2025.

For public business entities, the standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The point of the guidance is straightforward but labor-intensive: more transparency into expense components so investors can better forecast future performance.

That is not a cosmetic disclosure change. It requires companies to think about how expenses are grouped, how data flows through the general ledger and subledger stack, and whether current reporting systems can produce the right level of detail without manual workarounds. If controls are already fragile, this standard will expose the weak spots fast. The smartest move in 2026 is to use the relative calm to clean up data quality, lock down mapping, and test the disclosure build before the requirement becomes mandatory.

Sustainability reporting is becoming a multi-jurisdictional grind

KPMG’s sustainability section makes another practical point: reporting obligations are no longer confined to one regulator or one geography. The firm highlights California climate laws, including SB-253, SB-261, and AB-1305, along with the New York State Mandatory Greenhouse Gas Reporting Program, where 2026 reporting is due by June 1, 2027.

It also points to EU rules relevant to U.S. companies, including the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. Add CDP’s 2026 questionnaires and deadlines, and the reporting picture starts to look less like a single compliance project and more like a cross-functional operating challenge that touches legal, finance, sustainability, internal audit, and external assurance.

That is where the work becomes real for KPMG teams. These rules are not just about narrative disclosures. They require consistent emissions data, governance oversight, evidence trails, and a process that can survive scrutiny across jurisdictions. A client that treats California, New York, the European Union, and CDP as separate check-the-box exercises will end up duplicating work and increasing the odds of inconsistency.

What matters most for audit and financial-reporting teams right now

The outlook’s value is that it turns a sprawling environment into a triage list. Near term, the biggest exposures are tariff-related uncertainty, unresolved refund mechanics, and the need to translate a legally shifting trade landscape into defensible accounting treatment. Next comes the quiet stretch on SEC and FASB activity, which is less a reason to relax than a chance to prepare.

For KPMG professionals, the message is clear: use the current lull to get ahead of controls, disclosures, and data architecture. The next wave is already scheduled, and the 2027 expense disaggregation requirement, plus expanding sustainability reporting demands, will reward teams that spent the quiet quarter building clean processes instead of waiting for urgency to force the issue.