Investors aren't the market's biggest loser if Trump, SEC end quarterly reporting

Core Viewpoint - The SEC is considering a rule change to allow public companies to file semi-annual reports instead of quarterly ones, which could save companies time and money while impacting the audit business of the Big Four accounting firms [1][8]. Group 1: Impact on Companies - Transitioning to semi-annual reports could potentially halve the costs and labor associated with quarterly filings, with expenses for preparing a 10-Q report ranging from $50,000 for smaller companies to over $1 million for larger firms [2]. - The SEC Chair indicated that any change would allow companies the option to choose their reporting schedule, suggesting that the market should determine the appropriate cadence for reporting [1][8]. Group 2: Impact on Big Four Accounting Firms - The Big Four accounting firms (Deloitte, EY, KPMG, PwC) could lose up to 15% of their annual audit fees if the rule change is implemented, significantly affecting their business model [4]. - Firms may need to consider cost-cutting measures, including hiring fewer employees and increasing the use of artificial intelligence tools, to offset the loss of revenue from reduced audit work [4][5]. - PwC has already indicated plans to hire one-third fewer graduates by 2028, with a 39% reduction in audit roles, partly due to the rise of AI [5]. Group 3: Historical Context and Industry Response - The proposal for semi-annual reporting is not new; it was previously suggested by Trump in 2018 but did not gain traction at that time [6][7]. - In 2018, the Big Four expressed strong support for maintaining quarterly reporting, citing its benefits for investors and capital markets, including minimizing information asymmetry and reducing market uncertainty [9][10]. - Despite their opposition to the rule change, the firms acknowledged the SEC's authority to review financial reporting requirements, indicating a willingness to consider improvements that could reduce compliance burdens [10].