Question

Annual Reports, accompanied by audited financial statements, have been the mandatory reporting requirement for incorporated entities since the mid 19th century. While the SEC mandates quarterly reports from public companies, these reports are only on earnings and are unaudited. Until recently these were also prepared on a proforma basis. With developments in technology and the need for more timely information in the very active stock markets, discuss the advantages and disadvantages of moving to mandatory quarterly or semi-annual audited financial statements for public companies from the current requirement of annual reporting. Indicate which alternative you support with the reasons for your choice.