The US Securities and Exchange Commission is currently evaluating aspects of the public company reporting framework, including whether quarterly reporting should remain mandatory or whether to shift toward a semiannual reporting model (see Corrie Driebusch, “SEC Prepares Proposal to Eliminate Quarterly Reporting Requirement,” Wall Street Journal, Mar. 16, 2026, https://tinyurl.com/mwcvf7tt). If adopted, this would represent one of the most significant changes to the US disclosure framework since the introduction of Form 10-Q in 1970. While no formal rulemaking has been adopted, the policy discussion reflects growing concern about reporting burden, cost, and the role of periodic disclosure in modern markets.
The proposal is grounded in legitimate concerns: Quarterly reporting has become increasingly complex, resource-intensive, time-consuming, and costly. In the author’s opinion, however, the debate may be less about reporting frequency and more about disclosure lag. Disclosure lag is the gap between when events occur, when management understands them, and when the market hears about them. Reducing reporting frequency does not solve this problem—and it may actually worsen it.
The Exchange Act Framework: Structure and Intent
The current reporting system is rooted in §§ 13(a) and 15(d) of the Securities Exchange Act of 1934, which require issuers to provide ongoing disclosure to the market [15 USC §§ 78m, 78o(d)]. These statutory obligations are implemented through a framework that has remained largely unchanged for decades. Annual reports are required under Rules 13a-1 and 15d-1 (Form 10-K), quarterly reports under Rules 13a-13 and 15d-13 (Form 10-Q), and current reports under Rules 13a-11 and 15d-11 (Form 8-K) [17 CFR §§ 240.13a-1, 240.13a-13, 240.13a-11; 17 CFR §§ 240.15d-1, 240.15d-13, 240.15d-11].
This structure is reinforced by Regulation S-K and Regulation S-X, as well as Exchange Act Rules 13a-15 and 15d-15, which require companies to maintain disclosure controls and procedures (DCP) and internal control over financial reporting (ICFR) (17 CFR §§ 240.13a-15, 240.15d-15). Sarbanes-Oxley Act §§ 302 and 906 further require CEO and CFO certifications, strengthening accountability for the accuracy and completeness of periodic reports.
Taken together, the framework is designed to balance timeliness with reliability. Quarterly reporting plays a central role in that balance by providing structured, comparable updates between annual reporting periods and helping ensure investors receive consistent, reliable, and timely information they can use to make informed decisions.
The SEC’s Current Proposal
Whether quarterly reporting should be retained, modified, or replaced is a central question in the current policy discussion. Proposals to move toward semiannual reporting reflect broader cost-benefit considerations, affecting the compliance burden, reporting costs, and potential effects on market behavior.
The perspective in this article does not focus on maintaining quarterly reporting. Rather, it focuses on reducing disclosure lag regardless of reporting cadence. Structured periodic reports—whether quarterly, semiannual, or otherwise—continue to serve an important role in providing standardized, comparable information. The key issue is how those reports interact with more timely forms of disclosure that provide more timely and useful information to market participants. Even under a semiannual reporting model, the gap between internal information and external disclosure would remain—and could widen.
Disclosure Lag: A Structural Misalignment
The modern corporate environment operates on a fundamentally different rhythm than the reporting framework that governs it. Internal reporting, often produced in real time or through monthly close processes, is designed for operational decision-making and may not be subject to the same level of validation, documentation, or control precision required for public disclosure. External reporting, by contrast, operates within a framework that incorporates DCP, ICFR, and independent auditor oversight.
Most companies close their books monthly, often within compressed timelines. Automation and technology have made these processes more efficient, although they remain resource intensive. Key performance indicators are monitored continuously, and risk metrics—whether operational, financial, or strategic—are tracked in near real time. Boards and audit committees are briefed regularly and do not rely on quarter-end reporting to assess performance.
External disclosure, by contrast, remains periodic, historical, and backward-looking. This creates a structural misalignment. Information exists internally on a continuous basis but is communicated externally at prescribed intervals. That gap is disclosure lag.
This gap is not simply a timing issue. It reflects a structural disconnect between how companies are managed and how they communicate with the market. As a result, investors receive information on a delayed basis compared to the information used by management and boards to make decisions.
Geopolitical Risk and the Limits of Periodic Reporting
This misalignment becomes more visible during periods of rapid change. Economic and geopolitical developments (such as supply chains disruptions, shifts in input costs, or changes in demand patterns) often evolve continuously rather than aligning with reporting periods. They can develop and often accelerate within a single quarter.
Management teams respond in real time, adjusting operations, forecasts and assumptions as conditions change. External reporting, however, captures these developments only at discrete intervals or when materiality thresholds trigger required disclosure. During these intervals, market participants rely on partial, lagging, or indirect signals. As a result, the market’s understanding of a company’s current condition may differ meaningfully from management’s. This is the practical effect of disclosure lag.
The Cost Question: Frequency Versus Format
The argument for reducing reporting frequency often centers on cost. Quarterly reporting requires significant coordination across finance, legal, compliance, and audit functions, and over time, disclosure requirements have expanded in both scope and complexity.
Nevertheless, it is useful to distinguish between the cost of generating financial information and the cost of preparing formal disclosures. Advances in technology have significantly improved the efficiency of internal reporting processes. Financial data is typically generated on a recurring basis to support management and governance.
The real burden lies in the preparation, documentation, and review required for external disclosure which is often driven by increasingly prescriptive reporting requirements. Reducing reporting frequency may change the timing, but it does not eliminate the underlying work if the same information continues to be generated internally.
The question, then, is not simply whether to report less often, but how to report more efficiently. Streamlining the format and scope of external disclosures—while using information already produced through internal processes—may be a more effective way to reduce cost without increasing disclosure lag.
Toward a More Aligned Reporting Model
In the author’s view, a more aligned approach would incorporate more frequent, streamlined disclosures. These would not constitute full financial statements, but rather a defined set of high-level, standardized metrics derived from existing internal reporting processes. Examples could include revenue trends or ranges, margin indicators, key operating metrics, and selected balance sheet indicators, such as liquidity or leverage measures. Depending upon the industry, this could include credit quality indicators, order backlogs, or other operational metrics management already uses to assess performance.
The objective would be to provide decision-useful updates without requiring full GAAP presentation, extensive note disclosure, or the level of detail associated with periodic filings. Standardization would be critical in order to promote comparability and limit complexity.
The ability to produce such information in a timely basis would vary across issuers and take into account differences across industries. Larger organizations with more mature systems and automated controls might be better positioned to generate consistent metrics, while smaller issuers might face greater operational challenges. Any policy evolution would need to account for these differences, potentially through scaled or phased approaches.
Importantly, more frequent streamlined disclosures would not necessarily be subject to audit or review procedures. Instead, they would rely on management’s disclosure controls and procedures, supported by information generated through ICFR. The existing assurance framework—annual audits and, where applicable, quarterly reviews—would continue to apply to formal financial statements. This distinction reflects the practical limitations of providing assurance on a continuous basis and the differing objectives of internal reporting and external disclosure.
Any transition toward more frequent or continuous disclosure would require careful regulatory design. Key considerations include defining permissible metrics, establishing standardized formats (potentially leveraging structured data such as XBRL), clarifying liability frameworks, and determining the role of auditor involvement. Pilot programs, or scaled adoption based on issuer size, could provide a practical path to evaluate feasibility without imposing undue burdens on issuers.
Implications
Controls and governance. From a governance standpoint, the information gap is already understood internally; the question is how much of that visibility should be extended externally. More frequent disclosure would place greater emphasis on the consistent execution of existing processes rather than the creation of entirely new control structures. The effectiveness of ICFR and the design of DCP would become increasingly important in supporting reliable outputs.
Audit committees would play a key role in overseeing the integrity and consistency of disclosed information, particularly as reliance on system-generated data increases. Any move toward more frequent, management-driven disclosure would need to be carefully structured to avoid selective disclosure concerns and ensure consistency across issuers. Standardization and clear regulatory guardrails would be necessary to preserve comparability and investor confidence.
Transparency and market function. Periodic disclosures, such as earnings announcements, often serve as focal points for price discovery. While capital markets incorporate information efficiently over time, the timing and structure of disclosure can influence how and when that information is reflected in prices. More frequent disclosure may distribute information more incrementally, potentially reducing reliance on discrete reporting events as primary information signals.
Reframing the policy debate. The policy discussion is often framed as a choice between quarterly and semiannual reporting. A more useful framing may be how to balance reporting frequency, timeliness, reliability, and cost within a modern disclosure framework. Companies already generate timely information internally. The opportunity that exists now is to extend a portion of that transparency externally in a disciplined and efficient manner.
Closing the Gap
The SEC’s efforts to reduce the reporting burden on issuers are appropriate and necessary. But reducing reporting frequency addresses only part of the issue. The core challenge is disclosure lag: the delay between economic reality and external communication. Companies already generate timely information internally. The question is how much of that information should be communicated externally, and in what form. A reporting model that incorporates more timely, appropriately scoped disclosure may better align with how information is generated and used in modern organizations, while preserving the reliability and discipline of existing reporting frameworks.
