Publication Type

Journal Article

Publication Date

12-2013

Abstract

We use survey responses from 2,901 corporate insiders to assess the costs and benefits of compliance with Section 404 of the Sarbanes-Oxley Act. The majority of respondents recognize compliance benefits, but they do not perceive these benefits to outweigh the costs, on average. This is particularly true among smaller companies where the start-up costs are proportionately larger. However, the perceived efficiency of compliance increases with auditor attestations, years of compliance experience, and after the remediation of a material weakness. Notably, the perceived effects of compliance depend largely on firm complexity, but are mostly unrelated to firm governance structure.

Keywords

Corporate governance, Internal controls, Regulation, Sarbanes-Oxley, Section 404

Discipline

Accounting | Finance and Financial Management

Research Areas

Finance

Publication

Journal of Accounting and Economics

Volume

56

Issue

2-3

First Page

267

Last Page

290

ISSN

0165-4101

Identifier

10.1016/j.jacceco.2013.09.002

Publisher

Elsevier

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

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