| Summary: | 碩士 === 國立臺灣大學 === 會計學研究所 === 107 === This study investigates the effect of tax related SEC comment letters on U.S multinationals disclosure of foreign cash. According to U.S GAAP, companies do not need to disclose their foreign cash balance. Therefore, considering foreign cash balance is tax-sensitive information, companies usually do not disclose it voluntarily. However, if the outcome of SEC’s timely review points out that there is an insufficiency of disclosure in a company’s financial report, SEC may issue a comment letter, which may demand a disclosure of foreign cash. The company receiving a comment letter may choose to accept the comment and correct their filings, or negotiate until developing a consensus with SEC. The decision made by the company, somehow implies the attitude towards the necessity of disclosure and the possible consequence that the information being used by tax authorities. Hence, this study seeks to find the effect of a tax related SEC comment letter on corporate foreign cash disclosure. The empirical results show that there is a positive relation between the receipt of tax related comment letter and foreign cash disclosure. Companies receiving a tax related comment letter significantly increased its foreign cash disclosure, which imply that companies usually follow SEC’s comment to increase foreign cash disclosures while it may attract attention from tax authorities. In addition, this study also finds that the effect of tax related SEC comment letter is greater with companies experiencing poor corporate governance. In general, this study may be useful to the government and academic field.
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