The Impact of the Sarbanes-Oxley Act on the Audit Fees of Australian Listed Firms

14 Pages Posted: 16 Jun 2009

See all articles by Fazlina Mohd Salman

Fazlina Mohd Salman

University of New South Wales (UNSW)

Elizabeth Carson

University of New South Wales

Abstract

The Sarbanes-Oxley Act (2002) (SOX) was enacted to improve the corporate governance practices of US firms. Significantly, foreign registrants traded on US stock exchanges are also required to comply with SOX. This study assesses the impact of the SOX legislation on non-US firms by examining audit fees for Australian firms with foreign registrant status in the US from 2001 to 2005, compared with audit fees for other Australian firms. The findings indicate that Australian companies issuing American Depositary Receipts (ADRs) incurred substantial increases in audit fees and Australian firms subject to the full provisions of SOX incurred larger increases in audit fees. These findings provide a broader understanding of the compliance costs for non-US firms subject to SOX and therefore inform both policy-makers and firms.

Suggested Citation

Salman, Fazlina Mohd and Carson, Elizabeth, The Impact of the Sarbanes-Oxley Act on the Audit Fees of Australian Listed Firms. International Journal of Auditing, Vol. 13, Issue 2, pp. 127-140, July 2009. Available at SSRN: https://ssrn.com/abstract=1417023 or http://dx.doi.org/10.1111/j.1099-1123.2009.00399.x

Fazlina Mohd Salman (Contact Author)

University of New South Wales (UNSW) ( email )

Kensington
High St
Sydney, NSW 2052
Australia

Elizabeth Carson

University of New South Wales ( email )

Sydney, NSW 2052
Australia
+612 9385 5822 (Phone)
+612 9385 5925 (Fax)

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