PSC Responds to SEC’s Semiannual Reporting Proposed Amendments

Published: Jun 30, 2026

The PSC expressed qualified support for the SEC’s proposed amendments to allow semiannual reporting (Form 10-S), citing flexibility for companies. However, they raised some concerns and stressed that independent accountant reviews must be maintained.

TXCPA's Professional Standards Committee (PSC) expressed qualified support for the SEC’s proposed amendments that would allow companies to file semiannual reports (Form 10-S) instead of quarterly reports (Form 10-Q). While the proposal is seen as clear and workable for both preparers and auditors, the PSC emphasized that investor needs and market expectations should remain the top priority.

The support is qualified due to several key concerns:
  • Limited cost savings: Companies are likely to continue providing quarterly financial information through alternative channels (e.g., earnings releases), and existing reporting processes and internal controls must still be maintained, reducing potential savings.
  • Reduced comparability: Optional semiannual reporting could make it harder to compare companies or track performance over time, especially if firms switch between reporting methods.
  • Less timely information: Semiannual reporting delays financial disclosures, which conflicts with increasing demand for timely data. Information shared outside formal filings may also lack independent accountant review, weakening investor protections.
  • Impact on credit agreements: Many debt agreements require quarterly reviewed financial statements, so adopting semiannual reporting could require costly renegotiations.
  • Minimal effect on IPO decisions: Any cost benefits are unlikely to significantly influence private companies’ decisions to go public.

Additionally, the PSC opposes any reduction in the requirement for independent accountant reviews of interim financial statements. These reviews play a crucial role in ensuring high-quality financial reporting, identifying issues early and easing year-end audit pressures, and should be preserved regardless of reporting frequency.

Read the Exposure Draft here. View TXCPA PSC comment letter here.

 


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