SEC Considers Ending Quarterly Reporting Amid Trump’s Push, Big Four Accounting Firms Face Revenue Risks

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> While the Big Four have declined to comment on the current proposal, industry experts anticipate they will closely monitor the rulemaking process. Larry Rand, a financial consultant and economics professor, noted that firms may attempt to offset lost audit revenues by expanding advisory and tax services, though cost reductions, including workforce downsizing and increased AI usage, are expected. !-- wp:paragraph --> PwC recently announced plans to reduce college hiring by one-third by 2028, driven partly by AI automation transforming entry-level roles, a trend that could accelerate if quarterly reporting requirements are reduced. !-- wp:paragraph -->

Historical Context and Previous Attempts at Reform

This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> While the Big Four have declined to comment on the current proposal, industry experts anticipate they will closely monitor the rulemaking process. Larry Rand, a financial consultant and economics professor, noted that firms may attempt to offset lost audit revenues by expanding advisory and tax services, though cost reductions, including workforce downsizing and increased AI usage, are expected. !-- wp:paragraph --> PwC recently announced plans to reduce college hiring by one-third by 2028, driven partly by AI automation transforming entry-level roles, a trend that could accelerate if quarterly reporting requirements are reduced. !-- wp:paragraph -->

Historical Context and Previous Attempts at Reform

This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> It is crucial to distinguish between the SEC-required quarterly 10-Q filings and the quarterly earnings releases companies issue to investors and media. The 10-Q is audited by independent firms and adheres to strict disclosure standards, whereas earnings releases are unaudited and primarily highlight key financial metrics. !-- wp:paragraph -->

Big Four Accounting Firms’ Response and Adaptation Strategies

While the Big Four have declined to comment on the current proposal, industry experts anticipate they will closely monitor the rulemaking process. Larry Rand, a financial consultant and economics professor, noted that firms may attempt to offset lost audit revenues by expanding advisory and tax services, though cost reductions, including workforce downsizing and increased AI usage, are expected. !-- wp:paragraph --> PwC recently announced plans to reduce college hiring by one-third by 2028, driven partly by AI automation transforming entry-level roles, a trend that could accelerate if quarterly reporting requirements are reduced. !-- wp:paragraph -->

Historical Context and Previous Attempts at Reform

This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> Switching to semi-annual reporting could significantly reduce the administrative burden and costs associated with filing quarterly reports. Preparing a SEC-mandated Form 10-Q typically requires approximately 180 hours of work, with costs ranging from $50,000 for smaller firms to over $1 million for large-cap companies, excluding internal audit expenses. !-- wp:paragraph --> However, this change poses a substantial risk to the Big Four accounting firms—Deloitte, EY, KPMG, and PwC—which derive a significant portion of their audit revenue from quarterly reporting engagements. !-- wp:paragraph -->

“Up to 15% of the firms’ annual audit fees could be going away,” said Jerry Maginnis, CPA and former KPMG audit partner, highlighting the potential impact on their business models.

Distinguishing SEC-Mandated 10-Q Reports from Earnings Releases

It is crucial to distinguish between the SEC-required quarterly 10-Q filings and the quarterly earnings releases companies issue to investors and media. The 10-Q is audited by independent firms and adheres to strict disclosure standards, whereas earnings releases are unaudited and primarily highlight key financial metrics. !-- wp:paragraph -->

Big Four Accounting Firms’ Response and Adaptation Strategies

While the Big Four have declined to comment on the current proposal, industry experts anticipate they will closely monitor the rulemaking process. Larry Rand, a financial consultant and economics professor, noted that firms may attempt to offset lost audit revenues by expanding advisory and tax services, though cost reductions, including workforce downsizing and increased AI usage, are expected. !-- wp:paragraph --> PwC recently announced plans to reduce college hiring by one-third by 2028, driven partly by AI automation transforming entry-level roles, a trend that could accelerate if quarterly reporting requirements are reduced. !-- wp:paragraph -->

Historical Context and Previous Attempts at Reform

This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> Switching to semi-annual reporting could significantly reduce the administrative burden and costs associated with filing quarterly reports. Preparing a SEC-mandated Form 10-Q typically requires approximately 180 hours of work, with costs ranging from $50,000 for smaller firms to over $1 million for large-cap companies, excluding internal audit expenses. !-- wp:paragraph --> However, this change poses a substantial risk to the Big Four accounting firms—Deloitte, EY, KPMG, and PwC—which derive a significant portion of their audit revenue from quarterly reporting engagements. !-- wp:paragraph -->

“Up to 15% of the firms’ annual audit fees could be going away,” said Jerry Maginnis, CPA and former KPMG audit partner, highlighting the potential impact on their business models.

Distinguishing SEC-Mandated 10-Q Reports from Earnings Releases

It is crucial to distinguish between the SEC-required quarterly 10-Q filings and the quarterly earnings releases companies issue to investors and media. The 10-Q is audited by independent firms and adheres to strict disclosure standards, whereas earnings releases are unaudited and primarily highlight key financial metrics. !-- wp:paragraph -->

Big Four Accounting Firms’ Response and Adaptation Strategies

While the Big Four have declined to comment on the current proposal, industry experts anticipate they will closely monitor the rulemaking process. Larry Rand, a financial consultant and economics professor, noted that firms may attempt to offset lost audit revenues by expanding advisory and tax services, though cost reductions, including workforce downsizing and increased AI usage, are expected. !-- wp:paragraph --> PwC recently announced plans to reduce college hiring by one-third by 2028, driven partly by AI automation transforming entry-level roles, a trend that could accelerate if quarterly reporting requirements are reduced. !-- wp:paragraph -->

Historical Context and Previous Attempts at Reform

This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> The Securities and Exchange Commission (SEC) is actively pursuing a rule change that would allow public companies to file financial reports semi-annually, rather than the current quarterly mandate. This initiative follows President Donald Trump’s recent public call to reduce reporting frequency to save costs and enable management to focus more on operations. !-- wp:paragraph --> SEC Chair Paul Atkins indicated to CNBC that the agency is preparing a proposal to provide companies with the option to alter their reporting cadence. “For the sake of shareholders and public companies, the market can decide what the proper cadence is,” Atkins said. !-- wp:paragraph -->

Financial and Operational Implications for Companies and Auditors

Switching to semi-annual reporting could significantly reduce the administrative burden and costs associated with filing quarterly reports. Preparing a SEC-mandated Form 10-Q typically requires approximately 180 hours of work, with costs ranging from $50,000 for smaller firms to over $1 million for large-cap companies, excluding internal audit expenses. !-- wp:paragraph --> However, this change poses a substantial risk to the Big Four accounting firms—Deloitte, EY, KPMG, and PwC—which derive a significant portion of their audit revenue from quarterly reporting engagements. !-- wp:paragraph -->

“Up to 15% of the firms’ annual audit fees could be going away,” said Jerry Maginnis, CPA and former KPMG audit partner, highlighting the potential impact on their business models.

Distinguishing SEC-Mandated 10-Q Reports from Earnings Releases

It is crucial to distinguish between the SEC-required quarterly 10-Q filings and the quarterly earnings releases companies issue to investors and media. The 10-Q is audited by independent firms and adheres to strict disclosure standards, whereas earnings releases are unaudited and primarily highlight key financial metrics. !-- wp:paragraph -->

Big Four Accounting Firms’ Response and Adaptation Strategies

While the Big Four have declined to comment on the current proposal, industry experts anticipate they will closely monitor the rulemaking process. Larry Rand, a financial consultant and economics professor, noted that firms may attempt to offset lost audit revenues by expanding advisory and tax services, though cost reductions, including workforce downsizing and increased AI usage, are expected. !-- wp:paragraph --> PwC recently announced plans to reduce college hiring by one-third by 2028, driven partly by AI automation transforming entry-level roles, a trend that could accelerate if quarterly reporting requirements are reduced. !-- wp:paragraph -->

Historical Context and Previous Attempts at Reform

This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph --> The Securities and Exchange Commission (SEC) is actively pursuing a rule change that would allow public companies to file financial reports semi-annually, rather than the current quarterly mandate. This initiative follows President Donald Trump’s recent public call to reduce reporting frequency to save costs and enable management to focus more on operations. !-- wp:paragraph --> SEC Chair Paul Atkins indicated to CNBC that the agency is preparing a proposal to provide companies with the option to alter their reporting cadence. “For the sake of shareholders and public companies, the market can decide what the proper cadence is,” Atkins said. !-- wp:paragraph -->

Financial and Operational Implications for Companies and Auditors

Switching to semi-annual reporting could significantly reduce the administrative burden and costs associated with filing quarterly reports. Preparing a SEC-mandated Form 10-Q typically requires approximately 180 hours of work, with costs ranging from $50,000 for smaller firms to over $1 million for large-cap companies, excluding internal audit expenses. !-- wp:paragraph --> However, this change poses a substantial risk to the Big Four accounting firms—Deloitte, EY, KPMG, and PwC—which derive a significant portion of their audit revenue from quarterly reporting engagements. !-- wp:paragraph -->

“Up to 15% of the firms’ annual audit fees could be going away,” said Jerry Maginnis, CPA and former KPMG audit partner, highlighting the potential impact on their business models.

Distinguishing SEC-Mandated 10-Q Reports from Earnings Releases

It is crucial to distinguish between the SEC-required quarterly 10-Q filings and the quarterly earnings releases companies issue to investors and media. The 10-Q is audited by independent firms and adheres to strict disclosure standards, whereas earnings releases are unaudited and primarily highlight key financial metrics. !-- wp:paragraph -->

Big Four Accounting Firms’ Response and Adaptation Strategies

While the Big Four have declined to comment on the current proposal, industry experts anticipate they will closely monitor the rulemaking process. Larry Rand, a financial consultant and economics professor, noted that firms may attempt to offset lost audit revenues by expanding advisory and tax services, though cost reductions, including workforce downsizing and increased AI usage, are expected. !-- wp:paragraph --> PwC recently announced plans to reduce college hiring by one-third by 2028, driven partly by AI automation transforming entry-level roles, a trend that could accelerate if quarterly reporting requirements are reduced. !-- wp:paragraph -->

Historical Context and Previous Attempts at Reform

This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph -->

SEC Proposes Optional Semi-Annual Reporting Following Trump’s Push

The Securities and Exchange Commission (SEC) is actively pursuing a rule change that would allow public companies to file financial reports semi-annually, rather than the current quarterly mandate. This initiative follows President Donald Trump’s recent public call to reduce reporting frequency to save costs and enable management to focus more on operations. !-- wp:paragraph --> SEC Chair Paul Atkins indicated to CNBC that the agency is preparing a proposal to provide companies with the option to alter their reporting cadence. “For the sake of shareholders and public companies, the market can decide what the proper cadence is,” Atkins said. !-- wp:paragraph -->

Financial and Operational Implications for Companies and Auditors

Switching to semi-annual reporting could significantly reduce the administrative burden and costs associated with filing quarterly reports. Preparing a SEC-mandated Form 10-Q typically requires approximately 180 hours of work, with costs ranging from $50,000 for smaller firms to over $1 million for large-cap companies, excluding internal audit expenses. !-- wp:paragraph --> However, this change poses a substantial risk to the Big Four accounting firms—Deloitte, EY, KPMG, and PwC—which derive a significant portion of their audit revenue from quarterly reporting engagements. !-- wp:paragraph -->

“Up to 15% of the firms’ annual audit fees could be going away,” said Jerry Maginnis, CPA and former KPMG audit partner, highlighting the potential impact on their business models.

Distinguishing SEC-Mandated 10-Q Reports from Earnings Releases

It is crucial to distinguish between the SEC-required quarterly 10-Q filings and the quarterly earnings releases companies issue to investors and media. The 10-Q is audited by independent firms and adheres to strict disclosure standards, whereas earnings releases are unaudited and primarily highlight key financial metrics. !-- wp:paragraph -->

Big Four Accounting Firms’ Response and Adaptation Strategies

While the Big Four have declined to comment on the current proposal, industry experts anticipate they will closely monitor the rulemaking process. Larry Rand, a financial consultant and economics professor, noted that firms may attempt to offset lost audit revenues by expanding advisory and tax services, though cost reductions, including workforce downsizing and increased AI usage, are expected. !-- wp:paragraph --> PwC recently announced plans to reduce college hiring by one-third by 2028, driven partly by AI automation transforming entry-level roles, a trend that could accelerate if quarterly reporting requirements are reduced. !-- wp:paragraph -->

Historical Context and Previous Attempts at Reform

This is not the first time President Trump has advocated for semi-annual reporting. In 2018, he requested the SEC to study the feasibility of such a change. Despite eliciting feedback from various stakeholders, momentum stalled at that time. !-- wp:paragraph --> Back then, all Big Four firms opposed ending quarterly reporting, emphasizing its role in ensuring timely, reliable information that minimizes market uncertainty and information asymmetry. They also highlighted the importance of auditor reviews in investor decision-making. !-- wp:paragraph -->

Deloitte stated, “The SEC regime has helped make the U.S. markets the strongest and most trusted in the world by ensuring investors receive regular, timely, and reliable information.”

Nonetheless, the firms acknowledged the SEC’s authority to revisit reporting requirements and expressed openness to streamlining compliance burdens. !-- wp:paragraph -->

International Precedents and Market Dynamics

The concept of semi-annual financial reporting is not unprecedented. The European Union and the United Kingdom transitioned away from mandatory quarterly reporting over a decade ago, though many large companies continue to provide voluntary quarterly updates. !-- wp:paragraph --> Dominic Pappalardo, chief multi-asset manager at Morningstar, anticipates a similar pattern in the U.S., where companies may voluntarily maintain quarterly disclosures if they perceive investor demand. !-- wp:paragraph --> Market forces could also compel companies issuing debt or equity to maintain quarterly reporting to avoid higher capital costs or investor attrition due to inconsistent disclosure practices. !-- wp:paragraph -->

Potential Market Effects and IPO Implications

Reducing quarterly reporting obligations may encourage private companies to go public by lowering compliance costs, potentially reversing the decline in U.S. publicly listed firms—from over 7,000 in 1996 to under 4,000 in 2020. !-- wp:paragraph --> Such an uptick in IPO activity could help offset audit revenue losses for the Big Four, creating a zero-sum scenario where gains in new client audits balance reductions in existing ones. !-- wp:paragraph --> Larry Rand explained, “While existing clients may reduce audit frequency, increased IPO volume could generate new engagements, partially mitigating revenue declines.” !-- wp:paragraph -->

Outlook and Regulatory Process

The SEC will proceed with a public comment period and stakeholder engagement before finalizing any rule changes, a process that could take several months. !-- wp:paragraph --> Experts suggest the current political and regulatory environment favors the proposal’s passage, with the SEC prioritizing deregulatory initiatives and President Trump’s vocal support. !-- wp:paragraph --> Jerry Maginnis estimates the chances of approval as “at least 50-50, and perhaps better,” given the alignment of administration and agency leadership. !-- wp:paragraph -->

FinOracleAI — Market View

The SEC’s potential shift from mandatory quarterly to optional semi-annual reporting represents a significant deregulation with profound implications for corporate governance, investor transparency, and the accounting industry. !-- wp:paragraph -->

• Opportunities: Reduced compliance costs for companies; potential revitalization of IPO market; increased flexibility in corporate reporting schedules.
• Risks: Reduced audit revenues for Big Four firms; possible decrease in market transparency and timely information; challenges for investors relying on frequent, audited disclosures.
• Acceleration of AI and automation in accounting practices, potentially reshaping workforce requirements.
• Potential for voluntary quarterly disclosures to persist, mitigating some transparency concerns.

Impact: This regulatory change is likely to have a negative short-term impact on Big Four accounting firms’ audit revenues but could foster a more cost-efficient reporting environment for public companies and encourage market participation. The overall market impact will depend on the balance between reduced transparency risks and enhanced operational flexibility. !-- wp:paragraph -->