Big market loser if Trump, SEC end quarterly reporting isn’t investors

With the Securities and Exchange Commission now pursuing President Trump‘s request to consider a rule that ends the mandate that public companies file quarterly reports, there’s a lot to gain for companies in time and money, and a lot for the Big Four accounting firms to lose.

Trump originally proposed a switch to semi-annual reporting in a post on Truth Social a few weeks ago, saying it would “save money, and allow managers to focus on properly running their companies.”

SEC Chair Paul Atkins told CNBC soon after that a rule proposal is underway, though he suggested any change would give companies the option to change their reporting schedule. “For the sake of shareholders and public companies, the market can decide what the proper cadence is,” Atkins said.

With semi-annual reports, companies could theoretically halve the considerable costs and labor associated with filing quarterly reports. But the independent, outside accounting firms, in particular the “Big Four” — Deloitte, EY, KPMG and PwC — that help prepare them stand to lose a major portion of their audit business. On average, it takes about 180 hours to prepare a requisite form 10-Q, at an expense that can vary from $50,000 for smaller companies to well over $1 million for large-cap enterprises. And that doesn’t include expenditures for internal audit teams and operations.

It’s important to note the distinction between a quarterly report, or 10-Q, and an earnings report. The SEC-required 10-Q is prepared and reviewed by independent auditors, following strict disclosure standards. Around the same time, via a press release, companies issue a quarterly earnings report — which is not audited — to the media and investors, highlighting revenue, profits and other key metrics featured in the official 10-Q.

“I’m sure [the Big Four] are paying very close attention to this proposal as it potentially moves through the SEC,” said Jerry Maginnis, a CPA and former audit partner at KPMG. “It could have a very significant impact on their business model.”

He estimates that up to 15% of the firms’ annual audit fees “could be going away.”

The Big Four might be able to recoup some of that lost revenue by expanding their advisory and tax services, but if not, they would have to consider cost cuts, said Larry Rand, a visiting professor of economics at Brown University and a financial consultant. “If you are going to be losing a substantial revenue flow, you’re certainly going to have to look at ways of saving money,” he said. “They will hire fewer people. They will use more artificial intelligence tools,” he added.

That’s happening as it is. PwC said in August that it expects to hire one-third fewer people off college campuses by 2028 — 39% fewer in audit — partly driven by the rapid emergence of AI and how it’s changing entry-level jobs. The SEC rule change could be another blow to accounting firms’ workforces.

The proposed SEC rule change came as somewhat of a surprise. It hadn’t been among Trump’s plethora of deregulation targets, from immigration to DEI, nor was it included in the now-prescient Project 2025 playbook.

But during Trump’s first term, he threw out the same pitch in 2018. “That would allow greater flexibility & save money,” he posted on Twitter (now X). “I have asked the SEC to study!” The SEC elicited comments from a variety of affected stakeholders — the accounting industry, investment research firms, institutional and individual investors and academics — but ultimately, momentum stalled.

This iteration is likely to go through the same process, but has a good chance of succeeding, especially considering the current administration’s deregulatory wins to date and agencies’ steady compliance with Trump’s wishes. Indeed, a spokesperson for the SEC said that the agency “is prioritizing this proposal to further eliminate unnecessary regulatory burdens on companies.”

Each of the Big Four accounting firms declined to comment.

Although today’s economy is remarkably different from that in 2018 — look no further than tariffs, trade wars and AI — it’s instructive to review comments accounting firms did make back in 2018 when the SEC first undertook the quarterly reporting issue.

Not surprisingly, considering the negative implications for the industry, all four were in favor of retaining the quarterly cadence, each citing values that it brings to investors and capital markets. Deloitte, for example, said, “By helping to ensure that investors receive regular, timely and reliable information, the SEC regime has helped make the U.S. markets the strongest and most trusted in the world.”

“We believe quarterly reporting minimizes information asymmetry between management and investors and reduces market uncertainty,” EY said. “Quarterly reporting also helps reduce…