Analysing Different Security Management Issues

How has the Securities and Exchange Commission (SEC) improved reporting measures for publicly held companies? What are the weaknesses in SEC procedures?
The SEC has amended its reporting requirements in order to eliminate, modify, or integrate certain disclosure rules. These changes are aimed at improving disclosure effectiveness. Simplifying compliance without the need for significantly altering the total mix of information that is provided to the investors. Improving this reporting measures will allow public companies to eliminate redundant and duplicative requirements that forced the companies to publish or report the same information in different manners. Eliminating duplicate reporting requirements will make it easy for public companies to provide information to investors and investors will find it easy to retrieve information. The SEC also aimed at eliminating outdated requirements that are not consistent with recent legislation.
While the reporting measures are aimed at improving reporting for public companies, it is feared that the SEC might not be able to determine if companies do adhere to these changes. The SEC does not have effective internal controls in place to ensure that it can monitor and identify compliance. SEC systems are not routinely patched making them vulnerable to external attacks. Audit trail of systems is lacking, which makes it hard to determine or follow-up in case of an issue. SEC systems are not using encryption for sensitive information. This makes it easy for an intruder to steal the information.
What are the merits of zero-based budgets (ZBB) compared with incremental methods?
Zero-based budgeting is a budgeting method that requires the current year's budget be prepared from scratch with zero as the base. Incremental budgeting is a budgeting method where the previous year's budget is used to prepare the current year's budget (McCrie, 2016). Changes are made in the form of addition or reduction of expenses. Zero-based budgeting allows a company to create a new budget every year without having to consider the budget for the previous year (McCrie, 2016). There has to be a justification of resources before they are allocated any funds. Resources that will benefit the company are allocated the maximum resources. This ensures that the activities that are revenue generating and critical to the company's survival will get top priority. With such a method, a company is assured that it will not lose focus on other resources or activities that might end up affecting its bottom lines. Any budget allocation is done after a risk analysis has been done to determine its ratio to cost benefits analysis. This analysis is beneficial to the company because it can eliminate wasteful resources and reduce inefficiencies that might be present in a certain activity. Innovation in the company is promoted by using zero-based budgeting. Since budgets are prepared from scratch, the management is forced to come up with better ways of lowering their costs in order to justify the allocation of resources.
Compare and contrast three ways of determining the value of a capital investment that produces reduced losses or costs for operations
The payback method is the simplest and it determines the earnings required by an investment to be pay back the initial capital outlay. This method demonstrates a rapid repayment of capital, which allows the management to reinvest the savings (McCrie, 2016). This method fails to consider the time value of money. Net present value considers the time value of money making it more preferred for the calculation of capital investment. This method is insightful and beneficial to the management as it allows them to consider the time that it will take to recoup back the initial capital outlay. Lastly, the initial investment rate of return method will also overlook the time value of money, which would create a bias for investments that have the potential to yield returns quickly. This method considers the impact of depreciation and taxes that is overlooked by the payback method. The method fails to identify operating cash flows.
References
McCrie, R. (2016). Security Operations Management. Waltham, MA: Butterworth-Heinemann.