Economic consequences of the Sarbanes-Oxley Act of 2002

• 成果类型: Article; Proceedings Paper
• 署名作者: Zhang, Ivy Xiying
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2007.02.002
• 发表日期: 2007
• 关键词: stock-market; MANDATORY DISCLOSURE; required disclosure; nonaudit services; returns; INDEPENDENCE; inference

摘要

This paper investigates the economic consequences of the Sarbanes-Oxley Act (SOX) by examining market reactions to related legislative events. Using concurrent stock returns of non-U.S.-traded foreign firms to estimate normal U.S. returns, 1 find that U.S. firms experienced a statistically significant negative cumulative abnormal return around key SOX events. I then examine the crosssectional variation of U.S. firms' returns around these events. Regression results are consistent with the non-audit services and governance provisions imposing net costs. Additional tests show that deferring the compliance of Section 404, which mandates an internal control test, resulted in significant cost savings for non-accelerated filers. (c) 2007 Elsevier B.V. All rights reserved.