|
“This will save money, and allow managers to focus on properly
running their companies,” Trump wrote.
Trump asked the SEC to examine the three- versus six-month
reporting requirement during his first term. No change was made.
Supporters of the change say quarterly reporting is too costly
and time-consuming and discourages companies from wanting to go
public. They also say company executives focus too much on
hitting quarterly earnings targets and not enough on long-term
planning.
The Long-Term Stock Exchange has also been calling for a shift
in how often companies are required to report financial results.
The LTSE, a stock marketplace that advocates for companies to
focus on long-term goals and performance, said earlier this
month it will file a petition to the SEC to require companies to
report earnings results semi-annually, with the option to file
quarterly.
“This petition takes a critical step toward enabling genuinely
long-term companies to focus on sustainable growth rather than
quarterly noise," said Maliz Beams, LTSE's CEO, in a statement
about the planned petition.
Those who favor quarterly earnings say the reports provide
investors with valuable financial updates and make them aware of
any new risks a company is facing.
A report in 2024 from David S. Koo, an assistant professor of
accounting at the Donald G. Costello College of Business at
George Mason University, said that more frequent reporting often
provides more context and perspective for investors who need to
gauge a company's health and prospects.
Koo also said that was the original rationale for the SEC's
policy shift in 1970 that required companies to disclose their
financial results on a quarterly basis, rather than on a
semi-annual basis. It stemmed from a booming post-World War II
economy that then ran into a recession. Companies that were
thriving during that expansion were then able to hide their
shrinking profits during the downturn, which hurt investors.
“The purpose of quarterly reporting was to reduce that
information asymmetry,” Koo said.
All contents © copyright 2025 Associated Press. All rights reserved
|
|
