An Examination of the Wealth Effect of REIT Shares Due to the Introduction of Sarbanes Oxley Act : An Event Study Approach

The Sarbanes-Oxley Act 2002 legislation was passed by the U.S. Congress in 2002. SarbOx 2002 requires all publicly listed companies to meet a significant increased amount of accounting compliance requirements. The cost of compliance and CEO time in dealing with compliance requirements increased considerably, leading to reduced listing firms profitability and shareholder wealth. The increased cost of compliance under SarbOx has been suggested to be a major reason for public REITs going private in recent years. This study analyzed whether there have been any abnormal gains made by shareholders due to an announcement of an event