The Effect of SOX Section 404: Costs, Earnings Quality, and Stock Prices

• 成果类型: Article
• 署名作者: Iliev, Peter
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2010.01564.x
• 发表日期: 2010
• 页码: 1163-1196
• 关键词: sarbanes-oxley act; GOING-PRIVATE DECISIONS; economic consequences; Disclosure regulation; corporate governance; management; returns; FIRMS; performance; INVESTMENT

摘要

This paper exploits a natural quasi-experiment to isolate the effects that were uniquely due to the Sarbanes-Oxley Act (SOX): U.S. firms with a public float under $75 million could delay Section 404 compliance, and foreign firms under $700 million could delay the auditor's attestation requirement. As designed, Section 404 led to conservative reported earnings, but also imposed real costs. On net, SOX compliance reduced the market value of small firms.