NDLI: The Financial Impact of the Sarbanes-Oxley Act on Small vs . Large US Public Companies

Please wait, while we are loading the content...

The Financial Impact of the Sarbanes-Oxley Act on Small vs . Large US Public Companies

Content Provider	Semantic Scholar
Author	Primack, Stephen
Copyright Year	2012
Abstract	In the early 2000’s there were several large-scale accounting scandals involving auditing fraud and dishonesty from corporate board members. In a response to these illegal events and to restore confidence in the markets, Senator Paul Sarbanes and Representative Michael Oxley both created legislation to reform and enhance rules regarding corporate and auditing standards and accountability. This paper examines the effects of the Sarbanes-Oxley Act of 2002 (SOX) on small vs. large public US companies. It considers two major complaints: fees paid to auditors by publically traded companies were significantly higher due to the bill, and the impact of the bill was significantly more harmful to smaller companies than it was to larger companies. The impact of this bill is analyzed using panel data on fees, earnings, and size for publically traded companies over the years 2000-2010. My results show that the auditing fees paid by companies increase significantly following Sarbanes-Oxley, however, smaller companies pay a greater share of those fees and are disproportionately impacted by SOX. SOX raised average auditor fees as a percent of assets by 43% for a 15 percentile firm and 23% for an 85 percentile firm by market cap, versus their pre-SOX levels. 1 1 Acknowledgements: I would like to thank Professor Magin for choosing this topic, and for all the support and inspiration he has provided for me over the last two years. I would also like to thank PhD Candidates Matt Botsch and Pedro Castro for providing an extraordinary amount of help and feedback with the research process, strengthening my knowledge of econometrics, and teaching me how to use STATA. Lastly, I would like to thank my friends and family for all their continued love and support.
File Format	PDF HTM / HTML
Alternate Webpage(s)	http://live.econ.berkeley.edu/sites/default/files/Primack.pdf
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article

Central Library (ISO-9001:2015 Certified)
Indian Institute of Technology Kharagpur
Kharagpur, West Bengal, India | PIN - 721302

See location in the Map
03222 282435
Mail: support@ndl.gov.in

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in