Question

U.S. public firms currently report their financial results quarterly. If the SEC wants the U.S. capital markets to be as efficient as possible, do you think it would be worthwhile to require more frequent reporting (perhaps monthly)? Or would be better to require less frequently reporting (twice a year or once a year)? Be sure to explain your reasoning.

Answer 1

If the United State Public companies are reporting more often than it would be leading to more efficiency in the market due to constant public disclosure of operations so there will be a higher disclosure needs and Efficient market will always be advocating that there should be high amount of public information which will be present and they will already be discounted into the stock price so it will be leading to a lot of efficiency is there will be frequently reporting of their financial statement to the security and exchange commission in order to prohibit higher speculation in their stock price and they will be providing with the the efficient reflection of their stock price so they would not be much discrepancy between the price and value and it will be characteristic of an Efficient market and hence there should be high frequency of disclosure requirement in order to have a better financial market which will be efficient in nature.

so it can be said that it will be requiring more frequent reporting in order to disclose more of the public information and it will be leading to more efficient markets.