SEC Reporting Shortage: Is Your Tech Company at Risk?
Article

SEC Reporting Shortage: Is Your Tech Company at Risk?

May 28, 2025

For more than a decade, the U.S. has seen a shrinking supply of accountants — with no end in sight. Demographics are one reason: As of 2020, an estimated 75% of CPAs had reached retirement eligibility. The pipeline of new CPAs is also contracting, as college students reject accounting in favor of what they think are more lucrative fields like banking or engineering.

The CPA shortage makes it even harder to fill SEC reporting roles, especially in the technology industry, which can put companies in danger of missing reporting deadlines and even worse, reputational damage. Here’s why it is so hard to find — or keep — SEC reporting talent, and five warning signs that your company’s SEC reporting may be at risk.


Why CPAs Turn Away From Tech’s Complex Accounting

In addition to the general CPA shortage, there are several factors driving the dearth of SEC reporting professionals.

Accounting students often shy away from SEC reporting, because it typically adds nearly two years to the already lengthy training for CPA licensure. Many CPAs who do focus on SEC reporting find the stress, pay and quality of life not what they expect, which leads them to make a career change.

EC reporting roles also are often considered a stepping-stone to more highly compensated positions, like controller, that offer a direct route to becoming VP of Finance or CFO. And areas like corporate strategy, financial planning and analysis (FP&A), mergers and acquisitions (M&A) and investor relations (IR) all typically offer higher compensation, including additional equity compensation, for CPAs. This all leads to high turnover in SEC reporting.

The shortage of SEC reporting talent is even more pronounced in the tech industry, where the pace of regulatory change and the complexity of the sector’s accounting make SEC reporting particularly demanding. Tech’s common SEC reporting challenges include complex revenue recognition, frequent equity-based compensation, a high volume of M&A activity, rapid growth, R&D capitalization and expense timing, non-GAAP disclosures and cybersecurity and data privacy risks.


5 Warning Signs That You Need to Bolster Your SEC Reporting

Will the shortage of SEC reporting talent impact your company? Consider the following warning signs and their consequences.

  1. Missed deadlines and late filings — your team is scrambling, and auditors are raising concerns:
    • A public announcement concerning delinquency can negatively stock prices.
    • Your company can become ineligible for a short form registration statement for an entire year when raising money or registering shares for resale; a long form is more costly and requires more SEC review.
    • Missed deadlines can result in being delisted as a public company.
  2. Talent gaps and high turnover — critical roles are revolving doors, increasing risk:
    • CPAs are moving up or out, putting your company at risk for faulty controls or missed filings.
    • Management is solely focused on quarterly numbers, resources are dedicated to the close and little time is allocated to analyzing the business.
    • Management cannot get meaningful financial data for forecasting and financial modeling.
  3. Mounting auditor fees — more scrutiny, more issues and more costs:
    • There’s increased back-and-forth with auditors.
    • More documentation is required, adding up to more hours by limited staff.
    • A higher risk of findings requires additional consultants or premium rates.
  4. Material weaknesses in your financial statements and control deficiencies — a recipe for investor distrust:
    • Members of the Audit Committee may depart, sending a negative signal to the market.
    • Stock prices decline, or you’re challenged with raising money as investors may perceive the company as higher risk.
    • Your company attracts increased attention from regulators, potentially leading to investigations or penalties.
  5. Siloed IR/PR teams — this hinders the company’s ability to craft a compelling narrative for investors:
    • Positive financial stories aren’t amplified through public channels, leading to missed opportunities to shape favorable public and investor sentiment.
    • Critical metrics like EBITDA aren’t positioned strategically, failing to highlight progress or justify future projections.

Example: SEC reporting issues put tech company in turmoil

Server manufacturer Super Micro Computer (Supermicro) is a high-profile example of how reporting challenges can inflict damage on a tech company.

On August 2024, Supermicro delayed its 2024 10-K annual report and the first two quarterly reports for fiscal 2025, citing accounting problems. In October 2024, auditor Ernst & Young resigned, stating it was no longer able to rely on management's and the Audit Committee's representations. Supermicro appointed BDO as its new auditor in November 2024, and BDO later affirmed that the company's financial statements were accurate. But, the harm was done.

Supermicro included the following statement in its 2024 SEC 10-K filing:

“While we filed all of the delinquent reports on or before February 25, 2025, we expect to continue to face many of the risks and challenges related to previously being delinquent in our SEC reporting obligations.”

Breathe Easier About SEC Reporting

If any of the above warning signs sound familiar, it’s time to reevaluate your SEC reporting function. And a lack of in-house expertise doesn’t have to hold you back. Whether you’re publicly traded or preparing for IPO, Armanino can help you fill your accounting talent gaps. Find out how our SEC technical accounting experts can provide efficient, tailored solutions to your SEC reporting challenges.

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