Did the 1999 NYSE and NASDAQ Listing Standard Changes on Audit Committee Composition Benefit Investors?

Posted: 22 Jan 2017 Last revised: 25 Jan 2017

See all articles by Seil Kim

Seil Kim

Baruch College, City University of New York

April Klein

New York University (NYU) - Department of Accounting

Date Written: January 12, 2017

Abstract

In December 1999, the SEC instituted a new listing standard for NYSE and NASDAQ firms. Listed firms were now required to maintain fully independent audit committees with at least three members. In July 2002, the U.S. Congress legislated these standards through the Sarbanes-Oxley Act. Our research question is whether all investors benefited from the 1999 new rule. Using both an event study and a difference-in-differences methodology, we find no evidence of higher market value or better financial reporting quality resulting from this rule.

Suggested Citation

Kim, Seil and Klein, April, Did the 1999 NYSE and NASDAQ Listing Standard Changes on Audit Committee Composition Benefit Investors? (January 12, 2017). Accounting Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2901187

Seil Kim (Contact Author)

Baruch College, City University of New York ( email )

One Bernard Baruch Way, Box B12-225
New York, NY 10010
United States

April Klein

New York University (NYU) - Department of Accounting ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012
United States

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