SOX Section 404 Twenty Years After: Reviewing Costs and Benefits
Some issues of the Sarbanes Oxley Act of 2002 are still discussed controversially in literature. Thereof, Section 404 concerning internal control over financial reporting is one of the most criticized parts. This article focuses on costs and benefits of the section and impacts on earnings management...
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| Format: | Article |
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ACRN Publishing
2020-05-01
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| Series: | ACRN Journal of Finance and Risk Perspectives |
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| Online Access: | http://www.acrn-journals.eu/resources/jofrp09h.pdf |
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doaj-6128f5191a884ca1ab55d17d2ad27f392020-11-25T02:59:31ZengACRN PublishingACRN Journal of Finance and Risk Perspectives2305-73942020-05-019110311210.35944/jofrp.2020.9.1.008SOX Section 404 Twenty Years After: Reviewing Costs and BenefitsBianca Fischer0Bernadette Gral1Othmar Lehner2https://orcid.org/0000-0002-3317-9604University of Applied Science Upper AustriaUniversity of Applied Sciences Upper AustriaSaid Business School, University of OxfordSome issues of the Sarbanes Oxley Act of 2002 are still discussed controversially in literature. Thereof, Section 404 concerning internal control over financial reporting is one of the most criticized parts. This article focuses on costs and benefits of the section and impacts on earnings management. Most authors agree that compliance costs of Section 404 far outweigh its benefits. However, long-term benefits are expected. Regarding earnings management, studies show that the section has positive effects such as increased earnings quality and improved internal control systems. Although the section is heavily debated in literature, there is consensus that SOX Section 404 greatly contributed to the improvement of quality of financial reporting and of corporate governance as a whole.http://www.acrn-journals.eu/resources/jofrp09h.pdfsarbanes oxleysection 404internal controlcosts of soxbenefits of soxearnings managementearnings quality |
| collection |
DOAJ |
| language |
English |
| format |
Article |
| sources |
DOAJ |
| author |
Bianca Fischer Bernadette Gral Othmar Lehner |
| spellingShingle |
Bianca Fischer Bernadette Gral Othmar Lehner SOX Section 404 Twenty Years After: Reviewing Costs and Benefits ACRN Journal of Finance and Risk Perspectives sarbanes oxley section 404 internal control costs of sox benefits of sox earnings management earnings quality |
| author_facet |
Bianca Fischer Bernadette Gral Othmar Lehner |
| author_sort |
Bianca Fischer |
| title |
SOX Section 404 Twenty Years After: Reviewing Costs and Benefits |
| title_short |
SOX Section 404 Twenty Years After: Reviewing Costs and Benefits |
| title_full |
SOX Section 404 Twenty Years After: Reviewing Costs and Benefits |
| title_fullStr |
SOX Section 404 Twenty Years After: Reviewing Costs and Benefits |
| title_full_unstemmed |
SOX Section 404 Twenty Years After: Reviewing Costs and Benefits |
| title_sort |
sox section 404 twenty years after: reviewing costs and benefits |
| publisher |
ACRN Publishing |
| series |
ACRN Journal of Finance and Risk Perspectives |
| issn |
2305-7394 |
| publishDate |
2020-05-01 |
| description |
Some issues of the Sarbanes Oxley Act of 2002 are still discussed controversially in literature. Thereof, Section 404 concerning internal control over financial reporting is one of the most criticized parts. This article focuses on costs and benefits of the section and impacts on earnings management. Most authors agree that compliance costs of Section 404 far outweigh its benefits. However, long-term benefits are expected. Regarding earnings management, studies show that the section has positive effects such as increased earnings quality and improved internal control systems. Although the section is heavily debated in literature, there is consensus that SOX Section 404 greatly contributed to the improvement of quality of financial reporting and of corporate governance as a whole. |
| topic |
sarbanes oxley section 404 internal control costs of sox benefits of sox earnings management earnings quality |
| url |
http://www.acrn-journals.eu/resources/jofrp09h.pdf |
| work_keys_str_mv |
AT biancafischer soxsection404twentyyearsafterreviewingcostsandbenefits AT bernadettegral soxsection404twentyyearsafterreviewingcostsandbenefits AT othmarlehner soxsection404twentyyearsafterreviewingcostsandbenefits |
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