Should public companies report twice a year?

The possibility of a major change in public company reporting — reducing quarterly reporting to semiannual reporting — is on the table, thanks to President Donald Trump, but what that would actually mean for the American capital markets remains unclear.

On Sept. 30, 2025, the Long-Term Stock Exchange petitioned the Securities and Exchange Commission to amend quarterly reporting requirements. Trump pitched the switch in the weeks prior in a post on Truth Social, saying it would "save money, and allow managers to focus on properly running their companies." Trump also attempted to spur this change in 2018 during his first term in office, but the SEC only made it so far as issuing a request for comment and did not progress further. 

Al Drago/Bloomberg

Modern financial reporting dates back to 1934, when Congress created the SEC and gave it the power to require the periodic reporting of public companies. The SEC began to require semiannual reporting in 1955, then switched to quarterly reporting in 1970. After the Enron scandal in 2001, Congress passed the Sarbanes-Oxley Act of 2002, which requires the top brass, namely the CEO and CFO, to sign off on a company's major disclosures — including its quarterly results on the Form 10-Q.

While many experts staunchly disagree with the notion of less frequent reporting, largely on the basis of risking investor confidence, a shift to semiannual reporting is seen as having potential upsides. 

Some argue that it would save public companies the cost of compliance. Others, like Trump, say that quarterly reporting has contributed to a shift away from long-term decision-making within companies and instead toward a short-term focus on profit and meeting quarterly forecasts. The notion is supported by a study by the American Accounting Association, which found that quarterly mandates from 1950 to 1970 resulted in a decline in investments.

On the other hand, research from David Koo, assistant professor of accounting at George Mason University's Costello College of Business, found that increased reporting during the same period actually helped investors better anticipate companies' future earnings and shifted their focus onto long-term earnings. 

Koo advised caution in applying historical findings to today as they examine "an increase in reporting in a very different information environment," he told Accounting Today in an email. "Our research provides evidence that can suggest that frequent reporting historically played a valuable role in helping investors assess a firm's long-term prospects."

Carly Burd and Rob Whited, assistant and associate accounting professors, respectively, at North Carolina State University, argued in an article that less frequent reporting wouldn't necessarily mean less information for investors. They emphasized that eliminating the quarterly reporting requirement does not ban companies from reporting quarterly. 

Additionally, a shift to semiannual reporting would align the U.S. with foreign private issuers and with many foreign jurisdictions, including the European Union, the United Kingdom and Australia. (Note that many public companies in the EU and U.K. still voluntarily report information on a quarterly basis.) 

Then there's another group of unlikely supporters, as NPR reported: "Some climate-focused investors think less frequent reporting could encourage companies to think more long term about sustainability."

Argument for quarterly

Many experts remain strongly in favor of keeping quarterly reporting. Paul Miller, emeritus professor at the University of Colorado - Colorado Springs (and a former columnist for Accounting Today), argues that in order for information to be useful, it must be relevant, trustworthy and timely.  

"In the absence of any one of those three, the information is rendered unuseful," Miller told Accounting Today. "To come up with the idea that reporting once a year to the most sophisticated capital market in the world would be sufficient to keep it informed — this comes across as a terrible mistake."

Miller said that reporting eliminates uncertainty. Uncertainty creates risk, and risk creates a higher cost of capital. So by reporting regularly, companies effectively reduce their capital cost, and the cost of capital, he said, is much greater than the cost of compliance.   

"CEOs have said for decades — foolishly, I believe — that it's reporting that makes them think on a short-term basis," Miller said. "If that's the case, they're not looking at reporting as a useful thing, but as an obligation."

"Reporting frequently, well and completely with candor is far better than trying to manipulate your image once a quarter," he continued. "The markets are too smart to be fooled. Individuals can be fooled, but the market as a whole cannot."

Jerry Maginnis, a CPA and former audit partner at KPMG, estimated that the Big Four could lose up to 15% of their annual audit fees if this change were implemented, CNBC reported. But while accounting firms risk losing big, some say it won't save public companies as much money as they think. Switching to semiannual doesn't necessarily mean you can hire fewer accountants.

"You're not going to reduce your SEC reporting staff in house at a public company because you have to do it twice a year," Matthew May, president of Acuity, told Accounting Today. "[Auditors] are still reviewing the same amount of time, the same periods, just with a different lens."

Companies also have the option to go private and not comply, May added. Private equity firms are sitting on nearly $2.2 trillion of dry powder, according to S&P Global Market Intelligence. "There is a reasonable option to save money," he said, "but the cost of that option is to not have liquidity for your shareholders."

Matthew Kaplan, corporate partner at law firm Debevoise & Plimpton and co-author of an article published on the Harvard Law School Forum on Corporate Governance, added to the sentiment. 

"There are various reasons why our capital markets have, for quite a long time, been the deepest and most liquid," Kaplan told Accounting Today. "One of those reasons is almost certainly the fact that investors have more confidence in the regulatory regime under which public companies are governed in the U.S."

The likely outcome

Whether a change is made or not, Acuity's May anticipates that many companies will report regardless of what the rules require. Good actors will continue to give guidance out of habit and to fulfill their investors, while bad actors may take advantage of delaying the delivery of information to investors.

May cited stablecoins as an example: "They have no requirements to present data, but the market is requiring them to do monthly or quarterly reports on the stablecoins and the backings."

"It's not clear that semiannual reporting, even in the absence of a real-time reporting regime, leads to only semiannual reporting," Kaplan added. "It's not hard to imagine that some investors who become accustomed to regular reporting would demand or request interim disclosures from these companies that would be subject to U.S. anti-fraud rules. And, of course, you'd still have to abide by controls and procedures in the production of that material."

Yet another downside of this kind of voluntary reporting, he noted, would be the lack of uniformity between companies and across industries.

Dennis McGowan, vice president of professional practice at the Center for Audit Quality and a former PwC auditor, emphasized that the work auditors do in 10-Qs is not strictly related to the review of that quarterly report.

"A lot of that had to do with the company wanting to be comfortable that the auditor wasn't going to take another position or find an error after they've already reported to the street," McGowan told Accounting Today. "And so I think that no matter what's required, if a company is putting anything out publicly on a quarterly basis, they're going to want their auditors involved."

"It's a way of phasing the audit as well," he added. "The auditors being in there on a quarterly basis, being able to get comfortable with large transactions that occur in that quarter, is a way of phasing the audit throughout the year so it's not so concentrated at that traditional busy season."

The argument for more frequent reporting largely relies on the belief that it's what investors want, but McGowan noted that investors "are not a monolith." 

"It's been over 50 years since quarterly reporting was implemented," he added. "The CAQ takes the perspective that it is good to review rules and regulations to ensure they are still suited for purpose, and thus welcomes public dialogue."