Traders are now giving 73% odds that the SEC shifts public companies from quarterly to semi-annual earnings reporting. I hope they're wrong.

I've been in finance for over 20 years, as an auditor at EY, a capital markets banker at Citi and Barclays, and in the room when Rubrik went public. I've lived through the quarterly grind firsthand, and I understand why so many CFOs want relief from it.

But the idea that easing reporting requirements will strengthen public markets gets the causality exactly backwards. If we go ahead with this change without serious countermeasures, the consequences for investors and the broader economy could be severe.

Procrastination is human nature

The assumption behind this proposal is that companies will maintain internal discipline on their own, even without the external pressure stemming from quarterly disclosure. That's not how human nature works. When there's no forcing function, people procrastinate and defer the uncomfortable work for as long as they can.

History has shown us what happens when financial reporting requirements get loosened. In the early 2000s, banking regulations were relaxed in ways that allowed institutions to take on more risk and report less of their liabilities. By the time the real picture emerged, it was 2008. The housing crisis was not a surprise; it was the compounding result of reduced transparency and the entirely predictable behavior of people operating without external accountability.

The other thing people underestimate is how much the quarterly cycle does beyond the actual filing. Having helped take many companies public, I’ve seen firsthand what happens in the ramp up to an IPO. It forces finance teams to clean up the numbers and pushes the entire organization to tighten up. Much of that happens because companies know investors, analysts, auditors, and regulators are about to scrutinize every corner of the business.

That scrutiny then continues quarter after quarter, keeping these companies honest in ways that support the health of the broader economy. If you reduce that scrutiny, you just give problems more time to compound.

CFOs already have a delayed view of the business

What tends to get lost in this debate is that quarterly reporting is already a three-month look-back. By the time a company files, the numbers reflect a world that no longer exists. In normal circumstances, that lag is manageable. In our current reality, it isn't.

Tariffs are changing daily, oil prices are swinging, and supply chains that looked solid last month are under renegotiation right now. And yet, CFOs are still being asked to make long-term capital commitments based on last quarter’s numbers. What they actually need is the full financial picture of the business in real time so they can make grounded decisions with lower risk.

Moving to semi-annual reporting makes that problem significantly worse. Companies would be operating for six months on financial data that was already stale when it was filed. The decisions that get made based on that data, about hiring, capital allocation, and risk exposure, build up over time: and by the time the next filing forces clarity, the damage is already done.

What getting this right would actually require

There is a version of this that actually works, and I've seen it in practice. I advised Dell when they went private in 2013 and stopped doing the full quarterly financial production. The public investor calls, guidance, and prep that goes into managing analyst expectations all went away, but Dell's lenders wouldn’t let the financial discipline disappear with it. They still required quarterly reporting on the fundamentals, like revenue, margins, and cash flow tracked against forecast. It was the same rigor with a fraction of the overhead, and it worked.

The problem is that most public companies switching to semi-annual reporting won't have debt holders or private equity owners enforcing that standard. Without a forcing function, the discipline often disappears,and that gap between companies that maintain internal rigor and companies that don't is where the real systemic risk lives.

What's worth noting is that the financial close process itself is changing. AI is making continuous finance more viable, which means the operational burden that's driven this debate may ease on its own. If that's the direction things are heading, the right response will be to use that information to give CFOs and investors a clearer, more real-time picture of the business, not to pull back from transparency.

Reducing burden shouldn’t mean reducing visibility

Quarterly earnings reporting has real problems, and I won't pretend otherwise. The close cycle is grueling, the filing requirements are extensive, and the pressure on finance teams every 90 days is costly. But that doesn’t change the fact that public companies sit at the center of the economy. They employ millions of people, anchor retirement funds, and shape capital allocation across entire industries.

Markets don’t have to choose between transparency and efficiency anymore. Technology is making faster reporting and lower operational burden increasingly achievable at the same time. The goal should be to modernize disclosure without weakening the accountability on which healthy markets depend.