Economic Effects of SOX Section 404 Compliance: A Corporate Insider Perspective
54 Pages Posted: 3 Sep 2013 Last revised: 12 Nov 2013
There are 2 versions of this paper
Economic Effects of SOX Section 404 Compliance: A Corporate Insider Perspective
Date Written: September 2, 2013
Abstract
We use survey responses from 2,901 corporate insiders to assess the costs and benefits of compliance with Section 404 of the Sarbanes-Oxley Act. The majority of respondents recognize compliance benefits, but they do not perceive these benefits to outweigh the costs, on average. This is particularly true among smaller companies where the start-up costs are proportionately larger. However, the perceived efficiency of compliance increases with auditor attestations, years of compliance experience, and after the remediation of a material weakness. Notably, the perceived effects of compliance depend largely on firm complexity, but are mostly unrelated to firm governance structure.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Paper statistics
Recommended Papers
-
Economic Consequences of the Sarbanes-Oxley Act of 2002
By Ivy Zhang
-
The Sarbanes-Oxley Act and the Making of Quack Corporate Governance
-
Corporate Governance and Firm Value: the Impact of the 2002 Governance Rules
-
Market Reaction to Events Surrounding the Sarbanes-Oxley Act of 2002 and Earnings Management
By Haidan Li, Morton Pincus, ...
-
Why Do Firms Go Dark? Causes and Economic Consequences of Voluntary SEC Deregistrations
By Christian Leuz, Alexander J. Triantis, ...
-
The Sarbanes-Oxley Act and Firms' Going-Private Decisions
By Ellen Engel, Rachel M. Hayes, ...
-
The Sarbanes-Oxley Act of 2002 and Security Market Behavior: Early Evidence
By Zabihollah Rezaee and Pankaj K. Jain