Publication Type
Journal Article
Version
acceptedVersion
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
Citation
Alexander, Cindy; Bauguess, Scott; BERNILE, Gennaro; Lee, Alex; and Marietta-Westberg, Jennifer.
Economic effects of SOX Section 404 compliance: A corporate insider perspective. (2013). Journal of Accounting and Economics. 56, (2-3), 267-290.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/3661
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jacceco.2013.09.002