U.S. President Donald Trump on Monday (September 15) posted on his Truth Social account, again pushing for allowing public companies to abandon quarterly earnings reports and instead disclose results semi-annually. This proposal was also made during his first term. Trump wrote in the post: "This will save money and allow managers to focus on running companies properly. Have you ever heard the saying: 'China has a 50 to 100-year vision for corporate management, while we run companies quarter by quarter?' This is not good!!!"

Trump also expressed similar views via social media on August 17, 2018, saying that unnamed top business leaders told him that reducing reporting frequency would be better for U.S. business and employment, and that he had asked the U.S. Securities and Exchange Commission (SEC) to study the matter.

Famous investor Warren Buffett and JPMorgan Chase CEO Jamie Dimon have also criticized excessive focus on quarterly earnings. The Wall Street Journal reported on June 7, 2018, that Dimon said in June 2018 that executives often feel pressure to make quarterly forecasts, but this "often puts companies in a position where management, from the CEO down to the grassroots, feels obligated to deliver profits, and therefore may do things they wouldn't otherwise do," as reported by CNBC.

According to a 2018 report submitted to the SEC by Brown University, the SEC began requiring semi-annual reports in 1955 and changed to mandating quarterly reports for public companies in 1970. However, on Monday, some accounting and corporate finance experts said that switching the current system back to semi-annual reporting would have both negative and positive impacts on finance teams and their companies.

"I wouldn't call this a 'slam dunk' for CFOs. There's clearly more nuance beneath the headline," said Nick Araco Jr., CEO and founder of the CFO Alliance, a subscription-based peer network for financial leaders.

In roundtable discussions and online forums Araco participates in, many financial leaders view quarterly reporting as a healthy "pressure point" that keeps management sharp and in control of issues. He specifically noted that for middle-market and smaller companies, multiple CFOs see the quarterly system as a way to maintain agility.

"Many also view quarterly reporting as what I call an 'early warning system,'" Araco said in an email on Monday. "It allows boards, investors, and management to see trends before problems escalate into major trouble, which is especially important in today's volatile economic environment."

Of course, eliminating the time-consuming quarterly reporting process also has its advantages. "On the positive side, moving to semi-annual reporting could free CFOs and finance teams from the 'treadmill' of quarterly disclosures, giving them more bandwidth and resources to focus on long-term strategy, innovation, and building more agile, resilient organizations," Araco said. "This is certainly a compelling argument."

Jack Castonguay, associate professor of accounting at Hofstra University, pointed out that, simply put, at least initially, reducing the number of times companies report earnings each year would ease the pressure on CFOs and their finance departments. "It makes their jobs easier," he said, but at the same time, because less information is provided, investors' work in analyzing companies would become more difficult.

But looking further, when earnings are reported only twice a year, the pressure becomes greater. "They only have two chances to get it right," Castonguay said in an interview.

Trump's statement on Monday adds political weight to a movement that has recently shown signs of gaining momentum.

Last week, the Long-Term Stock Exchange, a stock trading platform focused on long-term goals, told the Wall Street Journal that it plans to petition the SEC to eliminate quarterly earnings requirements and instead allow companies to disclose only semi-annually. According to a September 8 Wall Street Journal report, TD Cowen analyst Jaret Seiberg said SEC action on this is "very likely" and "aligns with SEC Chairman Paul Atkins' deregulatory views," but he expects a proposal would not come until at least 2026, as also cited by Morningstar.

Robert J. Pawlewicz, assistant professor of accounting at the University of Richmond in Virginia, said the SEC's rulemaking process is typically lengthy and can take months or years, as it usually involves proposals, public comment periods, cost-benefit analysis, and final rules.

"That said, this administration and the SEC have shown a willingness to break from routine processes in several areas," Pawlewicz said in an email. "...An SEC led by Atkins could accelerate the timeline of the standard-setting process."

This process could also face resistance from the investment community. "While public companies (and their executives) may welcome this change because it would reduce their reporting costs, investors generally do not favor any reduction in information that informs their decisions," Pawlewicz said. "How this process evolves will provide an interesting lens on how much influence Wall Street has over the White House."

The SEC did not respond to a request for comment.