Recent actions by regulators and legislators reflect the belief that compliance with Section 404 of SOX is quite costly for non-accelerated filers. In this paper, we examine (a) the associations between the presence and remediation of internal control problems and audit fees for non-accelerated...

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...

Prior research provides inconsistent evidence about the effect of PCAOB censures of US Big 4 audit firms on investors’ reactions. In this study, we use shareholder ratifications of the auditor as a direct measure of investor perceptions about audit quality. We find that first-time censures of...

After restating their financial statements, companies may voluntarily restate their previously issued internal control (IC) reports for the financial statement (FS) misstatement periods, changing them from “effective” to “ineffective.” This paper examines the determinants and...

Section 404 of the Sarbanes-Oxley Act (SOX 2002) continues to be controversial. Using samples of SEC registrants with market capitalizations less than $150 million we find that, non-accelerated filers have significantly larger reduction in the likelihood of material misstatements, discretionary...

This study extends current literature related to non-audit services by investigating internal audit outsourcing to the external auditor. We posit that certain types of internal audit outsourcing (i.e. those which are non-routine, and thus tend to be non-recurring in nature) are unlikely to lead...