The SEC and International Cash Management

• Published date: 01 November 2015
• Author: Donald A. Walker
• Date: 01 November 2015
• DOI: http://doi.org/10.1002/jcaf.22096

31

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22096

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The SEC and International Cash

Management

Donald A. Walker Jr.

SEC

The SEC as an

agency is tasked with

assuring that inves-

tors are provided

with full, fair, and

adequate disclosure

about their invest-

ments. Generally, it

is not concerned so

much with corporate

actions as with the

timely disclosures

made to investors

about those actions.

Corporate disclosure

documents such as

the annual report on

Form 10‐K and the

quarterly report on

Form 10‐Q, and the

disclosures about

significant events

required on Form

8‐K, have both finan-

cial reporting require-

ments and qualitative

information require-

ments. Transaction‐ driven

documents such as proxy

statements and securities reg-

istration statements also have

both these financial reporting

requirements and qualitative

information requirements.

Part of the qualitative infor-

mation required is interpretive

narrative about the financial

information, explain-

ing the hows, whys,

and whens, but also

discussing the known

trends, demands

for resources, and

uncertainties that

may render currently

reported financial

results and financial

position not indica-

tive of future finan-

cial reports.

Reporting

Requirements

The financial

reporting require-

ments of the SEC

for U.S. corporations

are based on the

application of U.S.

generally accepted

accounting principles

(GAAP), the prom-

ulgation of which

is delegated to the

Financial Account-

ing Standards Board (FASB)

with oversight by the SEC. The

SEC looks to the requirements

of U.S. GAAP, which include

both application of principles

This article describes the impact of the Securi-

ties and Exchange Commission (SEC) disclosure

rules as they apply to U.S. corporations about

transactions with companies in nations that were

designated as state supporters of terrorism. The

rules require broader and more detailed disclosures

about executive compensation and the methods

for valuing complex financial instruments. Various

stakeholders want a deeper knowledge of manage-

ment activities in these regions of the world. Cash

balances held outside the United States by U.S. cor-

porations are seen as being withheld from invest-

ing in growth and taxation in the United States. A

most recent cause in the concern for increasing

employment and economic growth is the focus on

corporate cash balances held outside the United

States by U.S. corporations, which are seen both as

being withheld from investing in growth and provid-

ing jobs in the United States and not being taxed

by the United States. This article describes the

impact of the SEC disclosure rules as they apply to

U.S. corporations, but does not address the valid-

ity of these concerns or the morality of corporate

behavior. © 2015 Wiley Periodicals, Inc.

Commissioned