We examine whether passage of the Sarbanes-Oxley Act (SOX) in 2002 did in fact have the intended effect of reducing agency conflicts or did it alter managerial incentives in ways that could be detrimental to firm value. Our findings for the full sample suggest a decrease in firm value and the...

In the wake of the corporate scandals of the Enron era, Congress delivered the Sarbanes-Oxley Act (SOX) to bolster confidence in our nation's financial system. To save the system and protect the investing public from corporate abusers, Congress created a capable “toolkit” within SOX to fight...

We use a comprehensive and unique fraud database from the Institute for Fraud Prevention (IFP) to test the relationship between audit firm tenure and fraudulent financial reporting pre and post Sarbanes Oxley Act of 2002 (SOX 2002). Overall, short tenure is only marginally related to the...

We examine whether internal auditors with a strong organizational identity, defined as a perceived close relationship between the individual and their employer, provide overly lenient assessments of identified internal control weaknesses as compared to internal auditors whose organizational...

This paper investigates internal control restatements, i.e., companies and their auditors restating Section 404 internal control (IC) opinions from clean to adverse, after announcing financial statement restatements. We compare IC restatement companies with both companies that issue adverse IC...

We investigate the association between earnings management and internal control weaknesses as well as the association between earnings management and firm size. We use two samples: one from large accelerated filers, matched with the same number of firms with strong internal control, and the...

The main thesis of our study is to provide a comprehensive review on the disclosure of Internal Control Weaknesses (ICWs) reported under the Sarbanes-Oxley Act of 2002. More specifically, we classify research on ICWs into three main streams: (1) antecedents, (2) characteristics and (3)...

Whilst the benefits and potentials of the dual roles assumed by external auditors are emphasized, as well as the need to ensure that safeguards operating to guard against a compromise of objectivity and independence are in place, this paper also highlights the fact that even though such dual...