SEC Proposes 2 Rollbacks Letting Firms Report Twice Yearly and Skip Most External Audit Checks
Updated
Updated · The New York Times · Aug 28
SEC Proposes 2 Rollbacks Letting Firms Report Twice Yearly and Skip Most External Audit Checks
3 articles · Updated · The New York Times · Aug 28
Summary
Half-year reporting would replace quarterly filings under one SEC proposal, cutting a disclosure rule that has been in place for more than 50 years.
Most regulated companies would also be exempted from outside audits of internal controls, weakening safeguards meant to catch errors and fraud before they reach investors.
The rollback would pare back post-Enron rules Congress enacted in 2002 after the collapse of Enron and Arthur Andersen exposed how easily companies could hide financial trouble.
Money managers and public-interest groups question whether the changes would help investors, warning that weaker reporting quality could raise systemic risks seen in past crises including 2008.
Could removing quarterly earnings reports hide the next massive corporate fraud before investors even realize their money is gone?
If companies no longer need outside auditors to check internal controls, who is truly guarding the books against manipulation?
SEC’s 2026 Deregulation Proposals: Optional Semiannual Reporting, SOX 404(b) Rollbacks, and the Risks to U.S. Public Market Transparency
Overview
In May 2026, the SEC proposed major reforms to make it easier for private companies to go public, including optional semiannual reporting and raising the threshold for Large Accelerated Filer status. While these changes promise compliance cost savings and fewer regulatory hurdles, they also risk increasing information gaps and reducing transparency for investors. International experience, such as in the UK and EU, shows that less frequent reporting can lead to weaker analyst coverage, higher costs of capital, and greater risks for retail investors. Exempting more companies from auditor oversight further raises concerns about undetected control failures and market integrity.