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ASSESSMENT OF THE SARBANES-OXLEY ACT ON THE FIRM USING A DIFFERENCE-IN-DIFFERENCE ESTIMATOR

By Brian W. Sloboda

Abstract

[Will be given after completing the paper] Keywords: Sarbanes-Oxley Act, Valuation, Financial ReportingThe Sarbanes-Oxley Act (SOX) of 2002 which is also known as the Public Company Accounting Reform and Investor Protection Act promulgates the importance of effective internal control systems after a series of accounting scandals in the early 2000’s in which firms misreported their earnings. The main objective for the implementation of SOX is to improve the quality and transparency of financial reports and provide investors more confidence in these financial reports by focusing more on internal controls of financial reporting by firms. More importantly, Sections 302 and 404 1 of this Act require publically traded companies to certify the effectiveness of their internal controls and assessment by its management that the internal controls implemented are adequate. Though the Act has implemented more transparency in financial reporting requirements, many firms contend that these additional compliance requirements provide additional costs on their firms. The Sarbanes-Oxley Act of 2002 (SOX) mandates management evaluation an

Year: 2011
OAI identifier: oai:CiteSeerX.psu:10.1.1.204.6910
Provided by: CiteSeerX
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