On July 2, 2025 the ASB issued a Proposed SAS on fraud in an audit of financial statements. The Exposure Draft, Proposed SAS The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, proposes to supersede AU-C section 240, Consideration of Fraud in a Financial Statement Audit, in AICPA Professional Standards, and amend various other AU-C sections.
This week’s blog covers the activity of the major standard setters in the second quarter of 2025. We will review the issued standards of the AICPA, FASB, and GASB with an update on what to expect next quarter.
June 2025 brought fewer standard-setting developments than expected. The long-awaited 2025 Compliance Supplement remains unreleased, and no ASUs were issued by the FASB, despite earlier expectations—now delayed to Q3. FASB did hold meetings on government grants and interim reporting. GASB released Implementation Guide No. 2025-1, addressing key topics like leases, compensated absences, and financial reporting improvements, while also advancing projects on revenue recognition, subsequent events, and digital taxonomy. PEEC issued an exposure draft clarifying independence requirements for SSAE engagements, with comments due by September 5. Although the Auditing Standards Board approved a draft on fraud considerations, it has yet to be published. All signs point to a packed Q3—stay tuned!
In May, the FASB issued two new Accounting Standards Updates (ASUs). ASU 2025-03 introduces a principles-based approach for determining the accounting acquirer in variable interest entity acquisitions, while ASU 2025-04 clarifies the treatment of share-based consideration payable to a customer. Comment periods for proposals on intangibles and debt exchanges closed this month, and the agenda consultation input period wraps up in June. CECL relief, already approved, is still expected later in Q2. Looking ahead, four final ASUs and an exposure draft are anticipated in Q4. Meanwhile, the GASB remained relatively quiet but held a collaborative session with the AICPA’s State and Local Government Expert Panel, addressing implementation challenges, federal funding, and public sector workforce concerns. PEEC met twice to discuss topics such as SSAE engagements, alternative practice structures, digital assets, and international convergence efforts with the IESBA. Lastly, the ASB met in Minneapolis, where Sarah Lord passed the torch to Catherie “Halie” Creps as ASB Chair. The board voted to expose the fraud proposal and made progress on sustainability updates to the attestation standards, with a fraud exposure draft expected this summer.
From future-focused strategy to real-time advocacy, the 2025 AICPA Spring Council was a dynamic experience filled with bold ideas and impactful conversations.
Melisa F. Galasso is the founder and CEO of Galasso Learning Solutions LLC. A CPA with nearly 20 years of experience in the accounting profession, Melisa designs and facilitates courses in advanced technical accounting and auditing topics, including not-for-profit and governmental accounting.
Her passion is providing high-quality CPE that is meaningful, creates efficiencies and improves quality, and positively impacts ROI. She also supports essential professional development, audit level training, and train the trainer efforts.
Melisa is a Certified Speaking Professional, a Certified Professional in Talent Development (CPTD), and has earned the Association for Talent Development Master Trainer™ designation. Her passion for instructional design and adult learning techniques is one of the differentiators that set her apart from other CPE providers.
She also serves on the FASB’s Not-for-Profit Advisory Committee (NAC), AICPA Council, and the AICPA’s Women’s Initiative Executive Committee (WIEC). She also serves as a Subject Matter Expert for the Center for Plain English Accounting. She previously served on the AICPA’s Technical Issues Committee (TIC), the VSCPA’s Board of Directors, and is a past Chair of the NCACPA’s A&A committee. In addition, Melisa is the author of Money Matters for Nonprofits: How Board Members Can Harness the Power of Financial Statements by Understanding Basic Accounting which is available on Amazon or anywhere you purchase books online.
Melisa received a Top 50 Women in Accounting Award in 2021 by Ignition, is a 2020 Enterprising Women of the Year Award recipient, and was honored as a “40 under 40” by CPA Practice Advisor in 2017, 2018, and 2019. She was also named the 2019 Rising Star by her regional NAWBO chapter, received the Don Farmer award for achievement in technical content instruction, and earned several other awards for public speaking and technical training.
