Corporate Finance Commons^™

"Trapped Cash" In The Technology Sector: Accounting Disclosures Of Permanently Reinvested Foreign Earnings & Foreign Cash Levels, Russell P. Engel, Bridget M. Lyons

WCBT Faculty Publications

Permanently reinvested earnings in foreign subsidiaries and cash balances held outside the United States have increased dramatically in the technology sector over the past five years. These values, as well as related unrecognized deferred tax liabilities, are significant to investors, regulators and others. We examine disclosures of the largest technology firms over the 2007 to 2013 period and find that, as a group, the firms have increased the information provided but by fiscal 2013 only four of the ten firms disclosed both foreign held cash and an estimate of the unrecognized deferred tax liability related to permanently reinvested earnings.

Trapped Cash: When Is A Dollar Not Worth A Dollar?, Russell Engel, Bridget Lyons

WCBT Faculty Publications

During 2013 the concept of “trapped cash” garnered heightened attention as reports of Dell, Apple and other firms holding massive cash levels outside the US surfaced. So called “trapped cash” refers to cash and liquid investments held by subsidiaries located outside the United States. Firms with overseas subsidiaries located in jurisdictions where the tax rate is lower than the rates in the US can reduce taxes by attributing profits to foreign locales. But bringing the cash back to the US subjects the funds to the US corporate tax rate, less credit for foreign income taxes paid.

The House Ways and …

Corporate Revenue Miscalculations & The Impact On Stakeholders, Karen Cascini, Alan L. Delfavero, Ryan Bezner

WCBT Faculty Publications

Corporate earnings restatements are regarded as one of the most significant issues in accounting today. While there are various factors that can influence profitability, revenue is the key contributor to a business’ net income. During the 2000s, a multitude of domestic and multinational corporations faced significant issues with their revenue recognition practices. Although the investing public might regard any revenue restatement as laden with possible fraud, this is not always the case. Multinational firms face dual accounting systems, such as U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Currently, similarities and differences between the accounting systems …

Corporate Revenue Miscalculations & The Impact On Stakeholders, Karen Cascini, Alan Delfavero, Ryan Bezner

WCBT Faculty Publications

Corporate earnings restatements are regarded as one of the most significant issues in accounting today. While there are various factors that can influence corporate earnings, revenue is the key contributor to a business’ net income. During the 2000s, a multitude of domestic and multinational corporations faced significant issues with their revenue recognition practices. Although the investing public might regard any revenue restatement as laden with possible fraud, this is not always the case. Multinational firms face dual accounting systems, such as U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Consequently, similarities and differences among accounting systems, …

A Network Based Theory Of Foreign Market Entry Mode And Post-Entry Performance, Jing'an Tang, Ben S. Liu

WCBT Faculty Publications

Foreign market entry through equity investment has been extensively studied and various theoretical lenses have been used. Most previous research also focuses attention on either the entry mode selection decision or the topic of post-entry performance, but rarely both. We build on existing research by developing a model of foreign market entry and post-entry performance that uses network theory and organizational ecology to provide a fuller explanation of this complex and critical multinational enterprise strategic behaviour. Four pairs of total eight propositions were developed and justified based on extent literature and sound logical reasoning. By focusing on both entry mode …

Fair Value Accounting: Affect On The Auditing Profession, Danny A. Pannese, Alan Delfavero

WCBT Faculty Publications

During this period of global markets, multinational corporations are demanding financial accounting standards with enhanced uniformity. In an effort to achieve this objective, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working together on the Convergence Project, aiming to develop accounting standards that closely correlate with international financial reporting standards. In September 2006 and February 2007, the FASB issued two key fair value accounting (FVA) standards which focused on providing guidelines for fair value measurement (through a classification hierarchy), expanding disclosure requirements, and also allowing business entities to increase FVA's application. However, the …

The Eu Has Accepted Ias For Listed Companies: Will The U. S. Follow?, Karen Cascini, Anne Rich

WCBT Faculty Publications

International financial reporting standards (IFRS) issued by the International Accounting Standards Board (IASB), have become respected by many countries and regulatory agencies. The European Union (EU) has determined for most publicly held companies that IFRS promulgated by IASB meet the standards for cross-boarder listing. This paper will present a brief history of the development of international accounting standards and discuss the factors that led to the EU’s acceptance of them. The paper will then consider the case of the U.S. By examining the changes in the accounting environment in the U.S. and specifically looking at the role of the Securities …

Corporate Governance, Public Accounting Firm And Multinational Corporation: The Us Sox Act Perspective, Marc Massoud, Eunsup Daniel Shim

WCBT Faculty Publications

The purpose of this paper is to review US corporate governance systems and to highlight the mandated roles of audit committee and external auditor within the SOX Act. In addition, it discusses requirements and implications of the SOX Act for the foreign accounting firms and multinational corporations. Finally this paper provides a perspective on improvement of corporate governance and financial integrity. In order to regain trust from the financial market, the SOX Act mandates (1) to improve auditor’s independence by reducing conflicts of interest; (2) to increase corporate financial reporting responsibility by requiring a CEO or a CFO certify accuracy …