With uncharacteristic humility, the president wades into an ongoing debate over quarterly reporting.
The basic structure and timing of our securities-reporting regime were established by SEC rules made in 1934, 1955, and 1970, although to some extent these rules simply formalized longstanding practices that had been in place in some companies since before the establishment of the SEC. Currently - to elide reams of technical detail - domestic companies are required to file quarterly reports after their first, second, and third financial quarters; audited annual reports at the end of the year; and occasional reports upon the occurrence of certain material events that may be of interest to investors.
Over the decades, quarterly reporting has become the common time signature of our financial markets: Each annual measure has precisely four quarterly beats.
Preparing quarterly reports is costly in terms of both management time and treasure, the argument goes.
Critics of the current system - including, apparently, the "Top business leaders" who spoke with the president - also hold that an unintended byproduct of quarterly reporting is the "Short-term-ism" that plagues corporate America.
Weighing the costs and benefits of quarterly reporting is ultimately an empirical question, and the president is to be praised, mirabile dictu, for the measured tone of his tweet.
While the outcome of the SEC's study of quarterly reporting likely lies in the distant future, it is encouraging that President Trump and Chairman Clayton have taken an interest in disclosure reform.
https://www.nationalreview.com/2018/08/trump-targets-earnings-report-reform/
The basic structure and timing of our securities-reporting regime were established by SEC rules made in 1934, 1955, and 1970, although to some extent these rules simply formalized longstanding practices that had been in place in some companies since before the establishment of the SEC. Currently - to elide reams of technical detail - domestic companies are required to file quarterly reports after their first, second, and third financial quarters; audited annual reports at the end of the year; and occasional reports upon the occurrence of certain material events that may be of interest to investors.
Over the decades, quarterly reporting has become the common time signature of our financial markets: Each annual measure has precisely four quarterly beats.
Preparing quarterly reports is costly in terms of both management time and treasure, the argument goes.
Critics of the current system - including, apparently, the "Top business leaders" who spoke with the president - also hold that an unintended byproduct of quarterly reporting is the "Short-term-ism" that plagues corporate America.
Weighing the costs and benefits of quarterly reporting is ultimately an empirical question, and the president is to be praised, mirabile dictu, for the measured tone of his tweet.
While the outcome of the SEC's study of quarterly reporting likely lies in the distant future, it is encouraging that President Trump and Chairman Clayton have taken an interest in disclosure reform.
https://www.nationalreview.com/2018/08/trump-targets-earnings-report-reform/
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